Time-Barred Debts: When Creditors and Collectors Cannot Sue You for Unpaid Debts

If you have old, unpaid debts, you might be safe from a lawsuit to collect the debt. A creditor or debt collector has a limited number of years to sue you for an unpaid debt. The time period, called the statute of limitations, is set by state law. The time allowed varies greatly from state to state and for different kinds of debts—written contracts, oral contracts, promissory notes, or open-ended accounts (like credit cards). Under certain circumstances, this time period can be restarted. So, be very careful when talking to debt collectors about old debts. If you say the wrong thing, you could extend the time the creditor has to sue you for the debt.

Finding the Applicable Statute of Limitations

Again, statutes of limitations are set by state law. They usually range from about three to ten years and depend on the type of debt. To find out the statute of limitations for debts in your state, you can:

• Check out Nolo's 50-state chart: Statute of Limitations in All 50 States.
• Consult a lawyer.
• Research your state laws by going to a local law library, contacting your state consumer protection agency (see State Consumer Protection Offices to find your local consumer protection agency), or doing some research on the Internet. To find your state's laws and get information about legal research, see Nolo's Legal Research area.

Using the Statute of Limitations

If the creditor has waited too long to sue you, you must raise this as a defense in the papers you file in response to the lawsuit. If you can prove that the debt is older than the statute of limitations, then you will not have to pay it. If the debt collector knows that the statute of limitations has expired on the debt and still sues you, it might have violated the federal Fair Debt Collection Practices Act (FDCPA).

However, a statute of limitations does not eliminate the debt—it merely limits the judicial remedies available to the creditor or collection agency after a certain period of time. A debt collector may still seek voluntary payment of an old debt even though the law can't force you to pay it.

Some Debt Collectors Try to Enforce Time-Barred Debts

Aggressive debt collectors sometimes try to enforce debts that are barred by the statute of limitations. They buy these debts from original creditors for pennies on the dollar, so they make a tidy profit when they collect anything.

Some of these debt buyers use aggressive tactics when they try to collect on time-barred debts. According to media reports, they abuse and harass debtors and try to trick debtors into reaffirming debts so that the statute of limitations begins anew.

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