The statute of limitations on debt, and how a payment can reset it

A collector can be legally barred from suing you over a debt and still be legally allowed to call and ask you to pay it. That split confuses people more than anything else about old debt, and it’s why accounts from years ago still generate collection letters.

The statute of limitations only controls one thing: how long a creditor or collector has to take you to court. It doesn’t erase the debt in most states, it doesn’t control your credit report, and in some states you can accidentally give the collector a fresh start with a single small payment.

Two clocks people mix up

Old debt runs on two separate timers. One comes from your state, the other from federal law.

Because the clocks start at different points and run for different lengths, a debt can be too old to sue on while it still sits on your report, or off your report while it can still be sued on. The date of first delinquency guide shows how to compute the reporting side.

Why there is no single number for your debt

The CFPB says most states set limits between three and six years, with some longer. The length for your debt depends on several things:

• Your state. Each state writes its own limits.
• The type of debt. The CFPB lists debt type as a factor, and states often set different periods for different kinds of obligations.
• Your contract. Credit agreements often name a state whose law governs, and the CFPB lists contract terms as one factor.
• Where you live now. Moving to a state with different laws can change the answer.
• Who the lender is. Federal student loans have no statute of limitations at all.

We don’t publish a 50-state chart, on purpose. Those charts go stale, they flatten the debt-type distinctions above, and they can’t tell you which state’s law applies to your contract, which is often the real question. For your situation, your state attorney general’s consumer page, a legal aid office, or a consumer attorney can give you the current rule.

In a couple of states, an expired limit may do more than block a lawsuit. The National Consumer Law Center’s 2015 report said that outside Wisconsin and Mississippi, an expired limit only gives “a defense if sued, but the debt still exists.” Laws change, so use that as a starting point for your own research and confirm the current rule.

How a small payment can restart the clock

The CFPB says that in some states the period begins when a required payment is missed, and in others it runs from the most recent payment, “even one made during collection.” It also says a partial payment or an acknowledgment of the debt may restart the period, even after it has expired. The FTC described the same risk in 2012: in many states, a debt “can be revived if a person makes a payment or says in writing that they intend to.”

Example. Say you live in a state with a four-year limit that runs from your last payment, and where a payment revives an expired debt. These dates are made up for illustration.

That $25 payment did nothing for your credit report. The item still leaves in December 2028. What it did was hand the collector four new years to sue you for the full balance, plus whatever interest and fees your contract and state law allow. NCLC’s 2015 report on zombie debt described collectors encouraging “a small payment on time-barred debts just to restart the statute of limitations.”

Before you pay anything, agree to a payment plan, or sign anything that admits an old debt, find out whether your state lets that restart the lawsuit clock. The safest assumption is that a payment or a signed acknowledgment can count.

What collectors can and can’t do with time-barred debt

Regulation F, the CFPB’s rule under the Fair Debt Collection Practices Act, draws a bright line at 12 CFR 1006.26(b): “A debt collector must not bring or threaten to bring a legal action against a consumer to collect a time-barred debt.” The rule has one carve-out, for proofs of claim filed in a bankruptcy case.

The CFPB says that in most states a collector can still contact you about a time-barred debt by letter or phone, as long as it follows the other collection rules. It can also keep reporting the debt until the credit reporting period runs out, because that clock is separate from the lawsuit deadline.

Section 1006.26 does not require the collector to tell you the debt is time-barred. That is why the FTC’s 2012 case against debt buyer Asset Acceptance mattered: the company paid a $2.5 million civil penalty after the FTC alleged it failed to disclose “that debts were too old to be legally enforceable or that a partial payment would restart the clock.” The order required it to tell consumers it would not sue on debts it knew or should have known were time-barred. A letter that says nothing about the debt’s age is not proof that the debt is still enforceable.

If you get sued on an old debt anyway

Suing on a time-barred debt violates the FDCPA. A court can still enter a judgment against you if you don’t show up and raise the expired deadline yourself, and the CFPB says the burden is generally on the person being sued. The defense is real, but nobody raises it for you.

If you are served, respond by the deadline in the papers and raise the statute of limitations. You may also have a claim against the collector for filing the suit. Our guide to being sued by a debt collector covers the first steps and where to find free legal help.

What to do before you respond to a collector about an old debt

1. Don’t pay, promise to pay, or sign anything yet.
2. Find two dates in your own records or on your reports: your last payment, and the month you first fell behind.
3. Ask the collector for validation of the debt within 30 days of getting its validation notice. Debt validation gets you the original creditor, the amount, and other details you’ll need to work out the age.
4. Look up your state’s limit for that type of debt, and whether a payment or acknowledgment revives it. Legal aid or your attorney general’s office can confirm.
5. If the limit has run and the collector threatens a lawsuit, that’s a Reg F violation worth documenting and reporting to the CFPB.
6. If you decide to pay or settle anyway, which can be reasonable for a debt you owe, do it knowing what it does to the lawsuit clock. If you can, get the agreement in writing first.

Old debt is easier to handle once you know which clock you are dealing with. A debt you can’t be sued over, that drops off your report next year, is a very different problem from one that is still enforceable.