Debt Collection Statute of Limitations: Know Your Rights!

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Living with debt is a difficult proposition for most. You’ve undoubtedly been told by a financial advisor or loved one that there is good debt (home mortgage, auto loan, student loans) and bad debt (overdue credit cards). Regardless of the type of debt you have, all debt comes with a statute of limitations. If you’ve been receiving phone calls from debt collection agencies threatening to sue you for old debts you may have forgotten about, it’s vital that you learn the facts so you can protect yourself against these aggressive and potentially illegal actions.

When Debt is Too Old for a Collector to Sue

This might be the greatest source of confusion for those under the threat of litigation from overzealous debt collectors. How do you know when debt is too old? According to the Federal Trade Commission, state law typically determines how long the statute of limitations extends on debt. Generally speaking, the clock starts when you fail to make a payment on your debt. When the clock stops depends upon the type of debt in question and the law that applies in either your home state or the state specified in a credit contract.

On average, the statute of limitations for written and oral contracts is 4-5 years, with some states using a 3-year limitation and others pursuing a much higher 10-year limitation. Open-ended debts, such as credit cards, have a statute of limitations on debt averaging 5 years. Again though, there are a few that use a 10-year limitation. For a full list of debt types and limitations by state, consult this easy guide from Bankrate.

What to Do When Collectors Threaten to Sue

If you’ve been contacted by a debt collector looking to collect on an old debt, the first thing you can do is tell the debt collector not to contact you again. If you have to, submit your request in writing so you can prove it later on. However, this doesn’t bring about a solution to the situation. Even if you request that they stop contacting you, that will only end the immediate stress of dealing with harassing phone calls.

A debt collector can still pursue a lawsuit against you to collect on your old debts. Once you receive a legal notice of a lawsuit against you, be proactive and order a copy of your credit report. This allows you to identify the debt in question and determine its date of origin. Doing so allows you to verify that the particular account is in fact beyond its statute of limitations.

There are a few things to keep in mind as you begin your defense of a lawsuit against you for old debt:

  • Never sign an agreement to verify or validate the debt that might be provided to you by the debt collection agency. This is a tactic that many collectors will try. This deceitful approach gets you to validate the debt and results in the statute of limitations restarting fresh from zero.
  • The debt in question is still money that is owed. Whether your debt statute of limitations has come and gone or not is irrelevant. You still owe the money and it will still have a negative impact on your credit score, but you cannot be sued over it. That is the point in this discussion.
  • If you are served with a legal notice of the debt collector’s lawsuit, show up in court to defend yourself. According to, most consumers ignore these legal notices and have a judgement passed against them because they fail to defend their case. If a judge rules in favor of the debt collector because you fail to appear, you’ll see that money taken out of your paycheck, bank account, or tax refund.

Let Fair Debt Lawyers Help

You have the right to represent yourself in American courts, but the team at Fair Debt Lawyers has the experience and knowledge that you don’t. Allow us to review the status of your old debt, determine the validity (or lack thereof) of a debt collector’s lawsuit, and then represent you in court. In addition to defending you and supporting your case in court, we may even be able to help you bring private action against the debt collector. Suing you for time-barred debt is a violation of the Fair Debt Collection Practices Act (FDCPA), and we can help you defend your legal rights in this area too.

Brent Vullings