What is the Statute of Limitation on my Credit Card Debt?

The “Statute of Limitations” for credit card debt is a law limiting the amount of time lenders and collection agencies have to sue consumers for nonpayment.

That time frame is set by each state and varies from just three years (in 17 states) to 10 years (one state) with the other 23 states somewhere in between.

Statutes of limitations for each state (in number of years)

The purpose of a statute of limitations for credit card debt is to prevent creditors from taking consumers to court long after evidence of the debt has been discarded or disappeared.

If the lender or debt collector wins a court judgment against a consumer, it opens the door on several options for collecting the debt, including wage garnishment and seizing property.

However, if the statute of limitations has expired, that door closes. Nonetheless, consumers should not consider the statute of limitations a “Get Out of Jail, Free” card.

The debt doesn’t expire simply because it wasn’t collected in the time frame set by state law. The consumer still owes it, and debt collectors have a right to pursue it and make negative reports about it to the credit reporting bureaus.

That is just one of many, many nuances in the statute of limitations law. Here are 10 more that you should know about before determining whether it helps or hurts your situation.

What state’s laws on statute of limitations apply if I incur the debt in one state, then move to another state?

First thing to do is check the agreement you signed with the credit card company. Many card agreements have a clause in them called “choice of venue” that dictates which state court will preside over any conflicts. Typically, card companies or debt collectors want to file the case in whatever state they have the most advantages – i.e. state with the longest statute of limitations; state where courts have sided with creditors – but you can argue against any of them, if you have a compelling case. Bottom line here is this can be a tricky question and may require you to check with a consumer lawyer in your state.

When does the clock start running for the statute of limitations?

The clock starts the date you make your last payment and runs for whatever time period is applicable in your state. If, for example, you haven’t made a payment on your credit card since January of 2021 and you live in California where the statute of limitations is four years, the SOL expires in January of 2025. If, at any time in between, you got tired of debt collectors harassing you and decided to make just one payment or sign an agreement to make a payment, the clock could start again on that date. Check the laws in your state to find out how long the statute of limitations applies and whether payment of any kind restarts the clock.

Can a debt collector contact me and/or sue me after the statute of limitations has expired?

Yes, debt collectors can contact you after the statute of limitations has expired. You still owe the debt and if you don’t respond, the debt collector could still sue you. However, you can present a successful defense that the statute of limitations has expired … IF you show up for the court hearing. That “IF” is in caps because many consumers don’t appear in court. Either they don’t check their mail to see that a court date has been scheduled or simply ignore the summons to appear. If you don’t show up in court, you lose. Case closed. A judgment will be awarded against you.

» More About: What Happens If You Are Sued for Credit Card Debt

What happens if I have a court judgment against me, but I still don’t have the money to pay off the judgment?

Court judgments are a bad thing and should be avoided at all costs. If the debt collector is aggressive – and we’ve never heard of one who isn’t – they will go after anything you own that has value. Depending on the laws in your state, the creditor could go after your home, car, boat, property or even that 66-inch flat screen in your living room. If they can take it and sell it for the money they’re owed, they will. At the very least, they can put a lien against those assets, meaning you can’t sell what you own, without settling up with the creditor first.

Is there a statute of limitations for court judgments?

Yes, but be careful waiting for it to expire. The statute of limitations on court judgments ranges from three years (Oklahoma) to 21 years (Ohio), with most states somewhere around 10 years. The judgments are easily renewed so chances are that eventually you will have to confront the judgment and pay it. Be aware that states allow interest to collect on the judgments until the debt is paid off. The interest ranges from 4% above Fed (Kansas) to 14% (South Dakota).

What does “time-barred debt” mean?

A “time-barred debt” is a debt that is no longer legally collectible because the statute of limitations has run out on it. It also is the name of the defense you would use if a debt collector tries to sue you after the statute of limitations on your debt has expired.

What should I do if I get sued for a time-barred debt?

You have a few options, but the best thing you can do is make sure you appear on the court date or you will lose the suit. Once in court, you can use the “time-barred defense” and show paperwork that proves the statute of limitations has run out so the case will be dismissed. Beyond that, you have three clear options: A) Pay nothing. You should understand that the debt will negatively influence your credit score for seven years, but with no court judgment against you, you don’t legally have to pay. B) If your conscience gets involved, you can reach an agreement with the debt collector to pay the full amount or a partial amount to settle the debt. Either way, make sure the agreement is in writing and signed by both parties before making the first payment. Or C) Make a partial payment on the debt, which would be the least desirable choice. In many states, making a partial payment restarts the clock on the statute of limitations and may allow the debt collector to sue for the full amount.

If the statute of limitations has expired, does the debt automatically come off my credit report?

No. A delinquent debt stays on your credit report for seven years, regardless of whether the statute of limitations has expired. That delinquent debt loses impact over time, but it does remain there for seven years.

How can I verify that the debt is really mine?

If you get a call from a debt collector, never assume the debt they are trying to collect is legitimate. Do research and make sure you owe it, and the statute of limitations hasn’t expired. Your first step is to insist on a debt validation notice from the debt collector. Ask the debt collector for their name, the company’s name, the street address, telephone number and a professional license number. Then ask the company to mail you a “validation notice,” which details how much you owe and the name of the creditor seeking payment. The validation notice must be sent within five days of when the debt collector first contacts you. You have 30 days to dispute the debt in the validation notice. It is wise to have your credit report available when you receive the validation notice so you can compare the information between the two and determine if the debt is yours.

What provisions of the Fair Debt Collection Practices Act (FDCPA) apply when the statute of limitations has expired on my debt?

All of them. You still owe the debt, and debt collectors can still try to collect it, but they can’t violate provisions in the FDCPA. In other words, they can’t harass you, threaten you, misrepresent the amount owe, claim that you’ll be arrested, etc. If the debt collector does pursue payment of the debt, you can send a “cease communications” letter that stops debt collectors from contacting you. The letter should be sent by certified mail so there is a record of the debt collector receiving it. If the debt collector violates terms of the FDCPA, contact your local attorney general’s office, the Federal Trade Commission or the Consumer Financial Protection Bureau and file a complaint. You also can sue the debt collector for damages and be awarded up to $1,000.