Time-Barred Debts: When Creditors and Collectors Can't Sue You for Unpaid Debts

The "statute of limitations" bars creditors from suing for unpaid debts after a specific amount of time.

Updated by , Attorney · University of Denver Sturm College of Law

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.

However, 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.

When Does the Statute of Limitations Period Start?

The time limit for a particular statute of limitations starts to run from the time the agreement is breached. Usually, that means:

  • when you stop making payments
  • if insurance lapses on collateral, or
  • some other significant act or omission occurs that puts the ball back in the creditor's court to enforce the agreement.

Statutes of Limitations for Various Types of Debts

The amount of time a creditor has to sue you depends on the type of debt you have and your state's laws.

Written Contracts

Many states categorize the following as "written contracts" for the purpose of the statute of limitations:

  • promissory notes
  • credit card agreements (with exceptions), or
  • other written loan agreements.

Whatever your state's law sets as a statute of limitations for written contracts will usually apply to a written credit agreement with your creditor.

Oral Agreements

If you made a promise to pay but didn't put it in writing, or if a creditor claims that you owe money based on an oral agreement, then most states will apply a different statute of limitations.

The statutes of limitations for oral agreements are either shorter than the time limit for written contracts (most states) or the same time limit (other states).

Open Accounts (Credit Cards)

Some states distinguish credit cards from standard "written contracts" and instead classify them as open-ended or revolving accounts. In those cases, the statute of limitations might be different, usually shorter than the time limits for written contracts.

However, some states give creditors (especially credit card companies) the option of treating the credit account as a written contract, thus extending the statute of limitations even further.

Installment Contracts

A different statute of limitations might apply if you enter into an installment payment agreement directly with a retailer. A retail installment agreement is different from a credit card in that the creditor is the store that sold you the goods, as opposed to a third-party bank financing your purchase.

You pay the purchase price directly to the seller over time. Usually, the statute of limitations, if applicable, is much shorter than the time limit for written contracts.

Mortgage Foreclosure

The period within which a mortgage lender can foreclose on your home might be different than the period for other written contracts.

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:

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 profit if they collect anything.

A Creditor Might Sue You Even After the Statute of Limitations Period Has Run

Just because the statute of limitations has expired doesn't mean a creditor or collector won't sue you. They might 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.

You'll have to raise the statute of limitations as a defense if you get sued. If you don't, the creditor may be able to get a judgment against you on an otherwise unenforceable debt.

Also, be aware that an expired statute of limitations usually doesn't 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.

A Collector Might Use Other Aggressive Tactics

Some debt buyers use aggressive tactics when trying to collect time-barred debts. They harass debtors and might even try to trick debtors into reaffirming debts so that the statute of limitations begins anew.

What Should You Do if a Collector Tries to Collect a Time-Barred Debt?

Except for in a few states where the expiration of the statute of limitations extinguishes a debt, a debt collector can still contact you and ask you to pay up, even if the statute of limitations on a debt has passed.

The most important thing is not to say or do anything—whether on the phone or in a written communication—that in any way acknowledges that you owe the debt. Acknowledging the debt or making even a token payment can extend or revive the statute of limitations in some states.

Be Careful Not to Waive, Extend, or Revive the Statute of Limitations

If you answer a collections suit by saying that the statute of limitations prevents the collector from getting a judgment, the collector might argue that you have waived, extended, or revived the statute of limitations in your earlier dealings.

Waiving the Statute of Limitations

If you waive the statute of limitations on a debt, it means you give up your right to assert it as a defense later on. The law makes it very difficult for a consumer to waive the statute of limitations by accident. A court will uphold a waiver only if you understood what you were doing when you agreed to waive the statute of limitations for your debt.

In certain circumstances, even then, a waiver might be unenforceable. If you think you might have waived the statute of limitations, you should still raise it as a defense (and force the creditor to demonstrate that you waived it).

Extending the Statute of Limitations

Extending the statute is often called "tolling." Tolling or extending the statute temporarily stops the clock for a particular reason, such as the collector agreeing to extend your time to pay.

Example. Emily owes the Farmer's Market $345. The statute of limitations for this type of debt in her state is six years. Normally, the statute would begin to run when Emily stopped paying the debt, but Farmer's gave her an additional six months to pay and therefore tolled or extended the statute of limitations for six months. After six months, Emily still doesn't pay the debt. The six-year statute of limitations begins to run at this point.

Reviving the Statute of Limitations

Reviving a statute of limitations means that the entire time period begins again. Depending on your state, this revival can happen if you make a partial payment on a debt or otherwise acknowledge that you owe a debt that you haven't been paying. In some states, a partial payment will only toll the statute rather than revive it.

Example. Ethan owes Memorial Hospital $1,000. The statute of limitations for medical debts in his state is four years. He stopped making payments on the debt in 2020. The four-year statute began to run at this point. In 2022, Ethan made a $300 payment and then stopped making payments again. In Ethan's state, his partial payment of $300 revived the statute of limitations. The hospital now has four years from the date of his $300 payment to sue Ethan for the remainder of the debt.

A new promise to pay a debt might also revive the statute of limitations in some circumstances. In most states, an oral promise can revive a statute of limitations, but the promise must be in writing in a few states.

Learn More

For a state-by-state chart on statutes of limitations for various debts and information on how to get out of debt and repair your credit, get Solve Your Money Troubles: Debt, Credit & Bankruptcy by Amy Loftsgordon and Cara O'Neill (Nolo).

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