- Statutes of limitations govern how long creditors and debt collectors can pursue you for money that you owe.
- Statutes of limitations for credit card debt vary from state to state.
- You can restart the clock on debt if you’re not careful.
Table of Contents
What is the Statute of Limitations for Credit Card Debt?
In Pennsylvania, the statute of limitations for armed robbery is five years. In the same state, the statute of limitations on credit card debt is four years. You may agree that reneging on the money you owe on plastic is less serious than holding up a bank or convenience store with a gun.
A statute of limitations limits the time between the event that triggers a legal action and the filing of papers with a court to begin that action. In the case of credit card debt, it’s likely to be when you last made a payment on your account. But read on to avoid circumstances in which you could reset the clock on that time limit.
”A statute of limitations is the limited period of time creditors or debt collectors have to file a lawsuit to recover a debt.” – Federal regulator
States' laws vary. Each state sets its own statutes of limitations for all sorts of crimes and civil matters. And, when it comes to credit card debt, the variations between states are wide. It’s commonly between three and six years. But in Wyoming, it’s eight years, and in Rhode Island, it’s 10 years.
See immediately below this section a list of statutes of limitations for credit card debt in each state. But read the rest of this article, too. Because it includes essential information you need to know.
And be clear those periods apply only to credit cards. Other sorts of debts typically – though not always – have longer limits.
Table: Statutes of Limitations on Credit Card Debt
|State||Statute of Limitations* (years)|
*To the best of our knowledge, this list, based on one published by Bills.com is correct. However, some states may have changed their statutes of limitations since it was compiled. So, be sure to check with your state’s attorney general’s office before you rely on the list. Find out how to contact yours using this online lookup tool.
When Does the Clock Start on Statutes of Limitations?
Again, states’ laws can vary over when the event occurred that triggered the statute of limitations. Often, it’s the date on which you last made a normal, scheduled, monthly payment on your card account.
But it could also be the last time you made any payment on that account. This can pose real dangers to your interests. So, read more about that in the following section.
How to Avoid Resetting a Statute of Limitations
Once you’re passed the statute of limitations on credit card debt that applies in your state, your creditor (the person or company to which you owe the money) can no longer sue you.
Some try it on by filing court papers, even though you have a perfect defense: The debt is “time-barred” by the statute of limitations. But you must make that defense in court.
Either you or your attorney needs to turn up at the hearing, armed with paperwork that proves the statute applies, and ask the judge to dismiss the case. He or she will likely oblige, on request. But you risk a judgment against you if you don’t turn up to the hearing.
Dangers dealing with creditors
In many places, that creditor can still contact you to request that you honor your commitments by repaying some or all the sum owed.
You must proceed with extreme care in your dealings with your creditor or collection agency. In some states, just acknowledging that you owe the money can restart the clock on the statute of limitations. And more commonly, making any payment, accepting a payment plan, or agreeing to a settlement offer can reset that clock. In other words, the statute’s limit begins all over again.
When The Washington Post reported on “zombie” (legally dead) debt collection techniques back in 2019, it described an “accelerating effort within the$11 billion debt collection industry to make profits from debts that the financial industry once wrote off.”
So, many collection agencies are increasingly trying to collect time-barred debt. And they sometimes use entrapment techniques to get consumers to say, write or do things that restart the statute of limitation’s clock.
Traps and pitfalls to avoid
Debt collectors usually record phone calls, so you must say nothing substantive to them if one calls. The only thing you should say on the phone is that the caller must write to you with the details of the alleged debt. Then politely end the call.
Financial regulator the Consumer Financial Protection Bureau (CFPB) is explicit about this:
“When a debt collector first contacts you in writing regarding a debt, it must provide you with a written notice with certain, legally-required information. If the collection agency first contacts you by phone, insist that they contact you in writing. Do not give personal or financial information to the caller until you have confirmed it is a legitimate debt collector.”
If the debt is time-barred by your state’s statute of limitations on credit card debt – and you don’t wish to pay it – you can reply to the creditor’s letter saying that you note that the debt is time-barred. However, do not acknowledge that the debt is yours. In any event, you must reply within 30 days.
You have a legal right to require the collection agency or creditor to contact you only by mail. And the CFPB has a range of downloadable letter templates that could keep you out of trouble. They include one instructing the agency to get in touch exclusively by mail.
Common tactics of debt scavengers
Legal website NOLO lists some of the unscrupulous tactics these “debt scavengers” commonly employ. They:
Promise to leave you alone for a small payment – No, they almost certainly won’t. They really want you to restart the clock on the statute of limitations, which that could do
Say they won’t report your debt on your credit report – An unsatisfied debt typically stays on your report for seven years and six months. Paying it off before then won’t usually remove the entry.
Threaten to sue – They can’t because the debt is time-barred.
Re-age your debt – This involves reporting your old debt to credit bureaus as if it were a new one. This is against the rules (though some try it), and you should complain to the credit bureaus if it happens to you.
Orally abuse or harass you – This is all too common. But it’s also illegal
Misrepresent themselves as “litigation firms” – Few debt collectors are lawyers. They just want to scare you into paying up.
Many of those are illegal. Report perpetrators to your state’s attorney general (find yours using this lookup tool) and the Consumer Financial Protection Bureau. Also, consider finding a specialist attorney who might be willing to sue the scavengers for damages on your behalf.
Can a Debt Collector Contact or Sue Me After the Statute of Limitations Expires?
Yes, as we just explained, a creditor or collection agency can contact you after your debt is time-barred.
That Washington Post article explained why: “Debt collectors say they comply with the law. Some people may want to pay off a debt after it has passed its statute of limitations to repair their credit score or out of a sense of obligation, industry officials say.”
And that’s true. However, a debt won’t automatically drop off your credit report (and would therefore continue to drag down your credit score) just because it’s been settled. Your creditor might offer to change that debt’s record on your report, which can work. But you must get such an offer in writing before you pay any money. Many collection agencies are notorious for breaking oral promises.
Original creditors vs. debt buyers
One of the reasons consumers are being increasingly harassed over old, time-barred accounts is the boom in debt buying. Time was when a credit card company’s collection department or collection agency would hound you for a few years. And then (assuming it hadn’t gotten around to suing you) shrug and write off the debt as the statute of limitations kicked in.
But, now, many card issuers sell the debt to a third-party debt buyer. And, as the years pass, those buyers have to pay fewer and fewer pennies on the dollar to purchase your debt. The good news is that they often have only very sketchy details of the account in default, often not enough to persuade a judge of its validity.
Unfortunately, this just encourages them to bend the rules (more accurately, break the law) that protect consumers from abuse, harassment, and other bad practices.
Lying is second nature to many of them. And they’ll often try to entrap you into saying or writing something that resets the statute of limitations clock.
NOLO says, “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.”
Some attorneys make good livings suing debt collectors who breach the law, sometimes acting on a conditional-fee (no-win, no-fee) basis. So start collecting evidence of breaches of the relevant laws as soon as they start. You might make a few bucks.
What state’s statutes of limitations apply if I incur debt in one state and then move to another?
That’s tricky because each state has its own laws on statutes of limitations on credit card debt. You’ll probably find that the judge will apply the law in the state in which you currently live.
But there are no guarantees here. And some jurisdictions may apply the law in the state where you signed your credit card agreement, according to Bills.com. Check with your state’s attorney general’s office.
What does “time-barred” debt mean?
Time-barred means that a debt is no longer collectible through the courts because the statute of limitations on credit card debt that applies to it has run its course.
Unfortunately, a time-barred debt can be turned into one that isn’t time-barred if the debtor acts in specific ways. So, be sure to read this article in full to avoid doing so.
Is there a statute of limitations for court judgments?
NOLO says: “Usually, judgments are valid for several years before they expire or "lapse." In some states, a judgment is effective for around five to seven years. In other states, like New York, it can be twenty years or longer. Exactly how long a judgment lasts depends on the laws of your state and the method that the creditor uses to try and collect on that judgment.
The legal website also warns that, in some circumstances, a creditor may be able to renew a judgment, meaning it can last almost twice as long as you initially thought. Indeed, in some states, creditors may even be able to revive a time-expired judgment.
Absent a renewal or revival, a creditor can still contact you after a judgment has lapsed. But it can’t threaten legal action against you. For more information, read Tips to Defend Yourself Against Zombie Debt.