How Far Back Can a Collection Agency Go to Collect a Debt?

Often, when a debtor owes a creditor money, the creditor will hire a professional collection agency to seek payment of the debt. These agencies may work on commission, receiving a percentage of the debt collected, or they may purchase the debt outright, usually for pennies on the dollar. Often, these debts are relatively old. In some cases, collection agencies may be legally prohibited from collecting on debts by state laws that set limits on the length of time payment of a debt can be pursued.

Debt Collection

Nearly all debts are legally transferable. When a creditor hires a collection agency or sells a debt to one, the collection agency has just as much right to pursue collection of the debt as did the original creditor. The fact that the debt was transferred does not at all affect the length of time that the debt collection agency can pursue the debt. However, debt collectors must respect the laws of the state in which the debt was issued.

Statute of Limitations

Each state has its own sets of laws regarding how long a debt can be collected. Generally, states will set different time limits -- or statutes of limitations -- on how long a creditor can pursue different types of debts. For example, while a creditor may be allowed to pursue debts deriving from contracts for five years, the creditor may be allowed to collect on a debt from a legal judgment for 15 years.


If a statute of limitations on a debt has expired, the debtor no longer has any legal obligation to pay the money that he previously owed. A debt collection agency is also no longer allowed to pursue collection of the money. The situation is similar to if the debt never existed. If a debt collector does sue the debtor in court, the judge must legally throw the case out of the court.


In most cases, the statute of limitations on a debt can be extended under certain conditions. For example, in most states, the statute of limitations begins from the time the last payment on a debt was made. If a debtor makes another payment on the debt, the statute of limitations may be restarted. Also, in some cases, particularly with money owed from a legal judgment, a judge can order the statute of limitations extended.

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About the Author

Michael Wolfe has been writing and editing since 2005, with a background including both business and creative writing. He has worked as a reporter for a community newspaper in New York City and a federal policy newsletter in Washington, D.C. Wolfe holds a B.A. in art history and is a resident of Brooklyn, N.Y.

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