What Is the Statute of Limitations for Debt Collection?
The statute of limitations is the legal deadline for filing a lawsuit to collect a debt. Once this period expires, the debt becomes "time-barred," meaning you lose the right to sue for payment. The clock typically starts running from the date of the last payment, the date the debt became due, or the date of the breach, depending on the state.
Understanding these deadlines is critical for anyone owed money. If you wait too long, you forfeit your ability to use the court system to enforce payment, no matter how legitimate your claim. This guide covers the limitation periods for all 50 states and explains how they apply to different types of debt.
Types of Debt and How They Affect the Deadline
Statutes of limitations vary not just by state but by the type of debt. Most states have separate limitation periods for four categories:
Written Contracts
A written contract is any agreement signed by both parties. This includes leases, loan agreements, service contracts, and promissory notes. Written contracts generally have the longest limitation periods because the terms are documented and disputes are easier to adjudicate.
Oral Agreements
An oral agreement is a verbal promise to pay. While enforceable in most states, oral agreements have shorter limitation periods because they rely on testimony rather than documentation. Proving the terms of an oral agreement in court is inherently more difficult.
Promissory Notes
A promissory note is a written promise to pay a specific amount by a specific date. These are common in personal loans between individuals. Many states treat promissory notes separately from general written contracts, sometimes with longer limitation periods.
Open Accounts
An open account is a revolving credit arrangement, such as a credit card or store charge account. These typically have shorter limitation periods than written contracts.
Complete State-by-State Breakdown
The following list shows the statute of limitations in years for each state. The format is: Written Contracts / Oral Agreements / Promissory Notes.
- Alabama: 6 / 6 / 6
- Alaska: 3 / 3 / 3
- Arizona: 6 / 3 / 6
- Arkansas: 5 / 3 / 5
- California: 4 / 2 / 4
- Colorado: 6 / 6 / 6
- Connecticut: 6 / 3 / 6
- Delaware: 3 / 3 / 3
- Florida: 5 / 4 / 5
- Georgia: 6 / 4 / 6
- Hawaii: 6 / 6 / 6
- Idaho: 5 / 4 / 5
- Illinois: 10 / 5 / 10
- Indiana: 10 / 6 / 10
- Iowa: 10 / 5 / 5
- Kansas: 5 / 3 / 5
- Kentucky: 10 / 5 / 15
- Louisiana: 10 / 10 / 10
- Maine: 6 / 6 / 6
- Maryland: 3 / 3 / 6
- Massachusetts: 6 / 6 / 6
- Michigan: 6 / 6 / 6
- Minnesota: 6 / 6 / 6
- Mississippi: 3 / 3 / 3
- Missouri: 10 / 5 / 10
- Montana: 8 / 5 / 8
- Nebraska: 5 / 4 / 5
- Nevada: 6 / 4 / 6
- New Hampshire: 3 / 3 / 6
- New Jersey: 6 / 6 / 6
- New Mexico: 6 / 4 / 6
- New York: 6 / 6 / 6
- North Carolina: 3 / 3 / 5
- North Dakota: 6 / 6 / 6
- Ohio: 8 / 6 / 8
- Oklahoma: 5 / 3 / 5
- Oregon: 6 / 6 / 6
- Pennsylvania: 4 / 4 / 4
- Rhode Island: 10 / 10 / 10
- South Carolina: 3 / 3 / 3
- South Dakota: 6 / 6 / 6
- Tennessee: 6 / 6 / 6
- Texas: 4 / 4 / 4
- Utah: 6 / 4 / 6
- Vermont: 6 / 6 / 5
- Virginia: 5 / 3 / 6
- Washington: 6 / 3 / 6
- West Virginia: 10 / 5 / 10
- Wisconsin: 6 / 6 / 10
- Wyoming: 10 / 8 / 10
When the Clock Starts Running
Determining when the statute of limitations begins is often more complicated than knowing how long it lasts. The start date depends on the type of debt and the state.
Installment Debts
For debts payable in installments (such as monthly loan payments), the clock usually starts on the date of each missed payment. Some states treat each missed payment as a separate breach, meaning you could sue for recent missed payments even if earlier ones are time-barred.
Lump-Sum Debts
For debts due in a single payment, the clock starts on the due date. If a contractor owed you $5,000 due on January 1, 2023, and your state has a 4-year statute for written contracts, your deadline to file suit is January 1, 2027.
Demand Debts
Some debts are payable "on demand," meaning whenever the creditor asks for payment. For these, the clock may start on the date the demand is made, not the date of the original agreement.
How Partial Payments Affect the Deadline
In many states, a partial payment by the debtor restarts the statute of limitations. This is significant for both creditors and debtors. If someone owes you $10,000 and makes a $200 payment after 5 years, the clock may restart from the date of that payment in states that follow this rule.
However, not all states treat partial payments the same way. Some require that the payment be accompanied by a written acknowledgment of the remaining debt. Others do not restart the clock for partial payments at all.
States where partial payments restart the clock include California, Florida, New York, and Texas, among others. If you are a creditor, even a small partial payment can extend your enforcement window significantly.
Written Acknowledgment and Its Effect
In some states, a written acknowledgment of the debt by the debtor can restart the statute of limitations. An email saying "I know I owe you $5,000 and I plan to pay it" may be enough to reset the clock in certain jurisdictions.
This is why experienced creditors include language in their demand letters requesting a written response. If the debtor responds acknowledging the debt, it may extend the time available to file suit.
Conversely, if you are a debtor, be cautious about signing anything or putting acknowledgments in writing if the statute may be close to expiring.
What Happens When the Statute Expires
When the statute of limitations expires, the debt does not disappear. The debtor still owes the money. However, you lose the ability to file a lawsuit to collect it. Here is what changes:
- You cannot file a new lawsuit. Courts will dismiss the case if the debtor raises the expired statute as a defense.
- You can still send demand letters. There is no law against asking someone to pay a legitimate debt, even after the statute expires. However, some states restrict what you can say in these communications.
- The debt may still appear on credit reports. Federal law allows most debts to appear on credit reports for 7 years from the date of first delinquency, regardless of the statute of limitations.
- The debtor can still pay voluntarily. If the debtor chooses to pay after the statute expires, the payment is valid. You just cannot force payment through the courts.
Tolling: When the Clock Pauses
Certain events can pause or "toll" the statute of limitations. Common tolling events include:
- Debtor leaves the state. In many states, the clock pauses while the debtor is living outside the state. If the debtor moved away for 2 years, those 2 years may not count against your deadline.
- Debtor is incarcerated. Some states toll the statute while the debtor is in prison.
- Debtor is a minor. The clock may not start until the debtor turns 18.
- Debtor files for bankruptcy. The automatic stay in bankruptcy pauses the statute of limitations.
- Fraud or concealment. If the debtor fraudulently concealed the debt or their whereabouts, the clock may be tolled.
Which State's Law Applies
When the creditor and debtor are in different states, determining which state's statute of limitations applies can be complex. Generally, the following rules apply:
- Contract specifies governing law. If the contract includes a choice-of-law provision, that state's statute typically controls.
- Where the contract was signed. If there is no choice-of-law provision, the state where the contract was executed often controls.
- Where the debtor resides. Some states apply their own statute of limitations to debts owed by their residents, even if the contract was signed elsewhere.
- Borrowing statutes. Many states have "borrowing statutes" that apply the shorter of the two potentially applicable limitation periods.
For cross-border disputes involving significant amounts ($10,000 or more), consulting an attorney is advisable.
Strategic Considerations for Creditors
If you are owed money, these timing strategies can help:
- Act early. The closer you are to the deadline, the more pressure the debtor may feel. But waiting too long risks losing your right entirely.
- Send a demand letter well before the deadline. Give yourself at least 6 months before the statute expires to allow time for negotiation and, if necessary, filing a lawsuit.
- Document partial payments. If the debtor makes any payment, document the date and amount. This may restart the clock in your state.
- Preserve evidence. As time passes, evidence can be lost and witnesses may become harder to locate. File suit before your evidence becomes stale.
- Consider the cost of litigation. Even if you are within the statute of limitations, a $500 debt may not justify the cost and time of a lawsuit. A demand letter alone may be sufficient.
Strategic Considerations for Debtors
If you owe money and the statute of limitations is approaching:
- Do not make a partial payment if the statute is about to expire. This could restart the clock and give the creditor additional years to sue.
- Do not acknowledge the debt in writing. A written acknowledgment may restart the statute in some states.
- Understand your rights. If a creditor files suit after the statute has expired, you must raise the defense. Courts generally do not dismiss time-barred claims on their own.
- Get legal advice. If you are unsure whether the statute has expired, consult an attorney before responding to any demand letter.
Frequently Asked Questions
Does the statute of limitations apply to judgments?
No. Once a creditor obtains a court judgment, a separate and usually longer limitation period applies. In most states, judgments are enforceable for 10 to 20 years and can often be renewed.
Can I sue after the statute of limitations expires?
You can file a lawsuit, but the debtor can raise the expired statute as a defense, and the court will likely dismiss the case. Filing suit on a time-barred debt may also expose you to liability under the Fair Debt Collection Practices Act if you are considered a debt collector.
Does sending a demand letter restart the statute of limitations?
No. Only actions by the debtor, such as making a payment or acknowledging the debt in writing, can restart the clock. A demand letter from the creditor does not affect the statute.
What if the debtor moved to a different state?
The applicable statute of limitations may depend on the contract's choice-of-law provision, the state where the contract was signed, or the debtor's current state of residence. Some states toll the statute while the debtor is out of state.
Does the statute of limitations apply to government debts?
Federal debts, including student loans and tax obligations, are often exempt from state statutes of limitations. The federal government generally has 10 years to collect tax debts and federal student loans have no statute of limitations for collection under current federal law. State and local government debts may follow different rules.
What is the difference between the statute of limitations and the statute of repose?
The statute of limitations begins running when the cause of action accrues, typically when the breach or default occurs. The statute of repose sets an absolute deadline measured from a specific event, such as the completion of construction, regardless of when the injury or breach was discovered. Statutes of repose are more common in construction and product liability cases than in debt collection, but they can affect certain contract claims related to construction projects.