What is a Debt Collection Statute of Limitations?

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  • Written By: Tameka McSpadden
  • Edited By: Jenn Walker
  • Last Modified Date: 25 September 2019
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Debt collection statute of limitations is the amount of time an original creditor or third-party collection agency can legally pursue a judgment for an outstanding balance. The statute of limitation prevents debt collectors from attempting to collect a past due account for an indefinite amount of time. Once the statute of limitation has expired, a debtor may be able to fight further collection activities, including lawsuits. The length of time a debt collection agency has in which to collect a debt typically depends on individual contract agreements.

Debts included in collection statute of limitations laws generally are those with written contracts, promissory notes, or oral contracts. The exact time frames and rules regarding debt collection statute of limitations are usually determined by government law. Debts involving written contracts typically have a longer statute of limitations of four to six years, while the debt collections statute of limitations for oral contracts is usually shorter, about two to three years.

Government debts such as student loans, child support, and taxes are not typically included in the debt collection statute of limitations. These debts normally may be pursued and reported to credit bureaus until the balances are paid in full. Governments are usually able to use wage garnishments and tax refund interception to recover funds that are owed to any government institution.


The statute of limitations for debt collection typically has no bearing on the length of time a debt can be reported to a credit bureau. Even though the creditor may no longer attempt to collect the debt, any unpaid balance can usually be reported to credit agencies and negatively impact the debtor's credit score. Filing for bankruptcy is one way to remove a debt with an expired statute of limitations from a credit report, but the bankruptcy itself can normally be reported for up to ten years.

Certain creditors will occasionally attempt to pursue a debt after the statute of limitations has expired. This commonly occurs when a debt has been sold from one third-party collection agency to another. If a lawsuit is filed, a debtor must not ignore court notices or hearing dates. Failure to appear at a hearing involving a debt with an expired statute of limitations can lead to a judgment being issued against the debtor. It is the responsibility of the debtor to attend hearings and dispute the creditors right to continue to collect on the debt.


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