Statute of limitations on debt recovery

Consumer protection laws in each state limit the amount of time creditors have to sue an individual for a debt owed. Creditors and collection agencies may not file a lawsuit against a consumer for unpaid debt after the statute of limitations has expired.


The statute of limitations depends on whether the debt was incurred through a verbal, open or written contract, and varies by type and state. According to MSN Money, most states consider credit card accounts open contracts rather than written.

Time Frame

The statute of limitations for debt recovery is a matter of state, rather than federal, law. Thus, the amount of time that an unpaid creditor has to file a lawsuit varies by state.


In some states, making a payment to the creditor at any time can restart the clock on the statute of limitations, even if the time limit for debt recovery has already expired in the individual’s state.


The statute of limitations may limit a creditor to the amount of time it can sue, but doesn’t limit its other forms of collection activity. Unpaid creditors may continue to contact consumers indefinitely in an effort to collect overdue bills.


Some creditors and collection agencies violate the law by suing consumers for debts that are time-barred by the statute of limitations. A creditor may win an illegal lawsuit if the debtor does not point out the expired statute of limitations to the court.

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About the Author

Ciele Edwards holds a Bachelor of Arts in English and has been a consumer advocate and credit specialist for more than 10 years. She currently works in the real-estate industry as a consumer credit and debt specialist. Edwards has experience working with collections, liens, judgments, bankruptcies, loans and credit law.

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