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

If you have old, unpaid debts, you might be safe from lawsuits to collect them. Creditors and debt collectors have a limited number of years to sue you for outstanding debts. This time limit is called the "statute of limitations."

The time allowed varies significantly from state to state, and for different kinds of debts. Written contracts, oral contracts, promissory notes, and open-ended accounts (like credit cards) can all have different statutes of limitations.

Under specific circumstances, the statute of limitations can restart. 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 it.

Finding the Applicable Statute of Limitations

State law sets the statutes of limitations. They usually range from about three to ten years depending 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
• consult a lawyer, or
• research your state laws by going to a local law library, contacting your state consumer protection agency, or doing legal research on the internet.

Using the Statute of Limitations as a Defense to a Lawsuit

If a creditor waits too long to sue you, you generally must raise this as a defense in the papers you file in response to the lawsuit. If you can prove that the statute of limitations period has passed, the creditor can't get a judgment against you.

But an expired statute of limitations doesn't usually eliminate the debt; it merely limits the judicial remedies available to the creditor or collection agency after a specific time. A debt collector may still seek voluntary payment of an old debt even though they can't use a lawsuit to force you to pay it.

Some Debt Collectors Try to Enforce Time-Barred Debts

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

Some debt buyers use aggressive tactics when trying 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. Or the collector might even file a collection lawsuit after the limitations period has passed, hoping you won't notice that the statute of limitations has expired and won't raise it as a defense to the suit.

Suing on a Time-Barred Debt Is Illegal Under the FDCPA

The federal Fair Debt Collection Practices Act (FDCPA) prohibits a debt collector from bringing or threatening to bring a legal action against a consumer to collect a time-barred debt. (12 C.F.R. § 1006.26(b)). A collector can run afoul of this prohibition even if it's unaware that a debt is time-barred.

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