If you’ve ever received a phone call from a debt collector asking about a credit card debt that you barely remember, you might be wondering just how long debt collectors can pursue an old debt.
The answer is complicated. Each state has its own statute of limitations on debt, and after the statute of limitations has expired, a debt collector can no longer sue you in court for repayment. However, in many places, debt collectors can still try to collect on old debts beyond the expiration of the statute of limitations.
If you have an old credit card debt that you haven’t paid off — or if you’re currently getting calls from a debt collector — here’s what you need to know.
How does debt collection work?
Generally, the earliest phases of the debt collection process begin to kick in about 30 days after a payment’s due date has passed and payment has not been made — the point at which the debt is marked as delinquent. Consumers may start to receive calls or notices from the creditor, but things may escalate if the creditor is unsuccessful.
“Later, often around 180 days after the original due date of the payment, the creditor might sell the debt to a collections agency,” says Michael Micheletti of Freedom Financial Network. “This step indicates that the creditor has decided to give up on obtaining payment on its own, and selling the debt to a collection agency is a way to minimize the creditor’s loss.”
At this point, the consumer will likely start to hear from the debt collector. Neither the debt nor the payment has changed, but another entity, the debt collector, now has the right to collect the payment.
“Debt collectors are companies that collect unpaid debts for others,” says April Lewis-Parks, director of education and corporate communications at Consolidated Credit. “It’s usually more cost-effective for companies to hire debt collectors than to continue to spend their own time and staff pursuing payment on delinquent accounts.”
Limitations on debt collection by state
The statute of limitations is a law that limits how long debt collectors can legally sue consumers for unpaid debt. The statute of limitations on debt varies by state and type of debt, ranging from three years to as long as 15 years. Below is a list of each state’s statute of limitations on debt to help get you started — but be aware that credit card issuers sometimes argue in court that the law in their home state (not yours) is what should apply.
|State||Written contracts||Oral contracts||Promissory notes||Open-ended accounts|
|Alabama||6 years||6 years||6 years||3 years|
|Alaska||3 years||3 years||3 years||3 years|
|Arizona||6 years||3 years||6 years||3 years|
|Arkansas||5 years||3 years||3 years||3 years|
|California||4 years||2 years||4 years||4 years|
|Colorado||6 years||6 years||6 years||6 years|
|Connecticut||6 years||3 years||6 years||3 years|
|Delaware||3 years||3 years||3 years||4 years|
|D.C.||3 years||3 years||3 years||3 years|
|Florida||5 years||4 years||5 years||4 years|
|Georgia||6 years||4 years||6 years||6 years|
|Hawaii||6 years||6 years||6 years||6 years|
|Idaho||5 years||4 years||5 years||5 years|
|Illinois||10 years||5 years||10 years||5 years|
|Indiana||6 years||6 years||10 years||6 years|
|Iowa||10 years||5 years||5 years||5 years|
|Kansas||5 years||3 years||5 years||3 years|
|Kentucky||10 years||5 years||15 years||5 years|
|Louisiana||10 years||10 years||10 years||3 years|
|Maine||6 years||6 years||6 years||6 years|
|Maryland||3 years||3 years||6 years||3 years|
|Massachusetts||6 years||6 years||6 years||6 years|
|Michigan||6 years||6 years||6 years||6 years|
|Minnesota||6 years||6 years||6 years||6 years|
|Mississippi||3 years||3 years||3 years||3 years|
|Missouri||10 years||5 years||10 years||5 years|
|Montana||8 years||5 years||8 years||5 years|
|Nebraska||6 years||4 years||3 years||4 years|
|Nevada||6 years||4 years||3 years||4 years|
|New Hampshire||3 years||3 years||6 years||3 years|
|New Jersey||6 years||6 years||6 years||6 years|
|New Mexico||6 years||4 years||6 years||4 years|
|New York||6 years||6 years||6 years||6 years|
|North Carolina||3 years||3 years||5 years||3 years|
|North Dakota||6 years||6 years||6 years||6 years|
|Ohio||8 years||6 years||15 years||6 years|
|Oklahoma||5 years||3 years||5 years||3 years|
|Oregon||6 years||6 years||6 years||6 years|
|Pennsylvania||4 years||4 years||4 years||4 years|
|Rhode Island||10 years||10 years||10 years||10 years|
|South Carolina||3 years||3 years||3 years||3 years|
|South Dakota||6 years||6 years||6 years||6 years|
|Tennessee||6 years||6 years||6 years||6 years|
|Texas||4 years||4 years||4 years||4 years|
|Utah||6 years||4 years||6 years||4 years|
|Vermont||6 years||6 years||5 years||3 years|
|Virginia||5 years||3 years||6 years||3 years|
|Washington||6 years||3 years||6 years||3 years|
|West Virginia||10 years||5 years||6 years||5 years|
|Wisconsin||6 years||6 years||10 years||6 years|
|Wyoming||10 years||8 years||10 years||8 years|
Source: World Population Review
How long can a debt collector legally pursue old debt?
Depending on the state, debt collectors may still pursue you even after the statute of limitations has elapsed — the time when your debt is considered “time-barred.”
“In some states, a debt collector is not allowed to try and collect on the debt if the debt has gone past the time limit for the state’s statute of limitations. In others, even though a debt collector can’t sue, they can still work to collect on the debt indefinitely,” says Micheletti.
These cases are becoming more common because lenders are increasingly selling off debts they’ve removed from their books for pennies on the dollar to third-party collection agencies who try to collect even though the statute of limitations has run out.
If you’re being sued over a debt that’s outside of the statute of limitations, you’ll need to appear in court and prove that the debt is too old to collect. Don’t skip your court date because you believe you can’t legally be forced to pay an old debt. If you don’t appear in court and defend your case, a judge may rule in favor of the debt collector.
Also be wary of making payments on your debt or making a payment agreement with your creditor — doing so could reset the statute of limitations on your debt and make it legal for debt collectors to sue.
What happens if you are being pursued by a debt collector after the statute of limitations has expired?
Consumers have many protections on debt collection activities, particularly after the statute of limitations has expired. The most important thing to remember is to avoid acknowledging that the debt is yours if a debt collector calls you about an old debt. There are three big reasons why you shouldn’t immediately claim responsibility for whatever debt a collector says you owe:
- Old debts have often been passed from one collection agency to another, and it’s very easy for debt collectors to make a mistake. The money they say you owe might not be your debt. It might belong to someone with a similar name or someone who once had your telephone number.
- In some cases, claiming the debt can reset the statute of limitations. If you’ve got an expired debt, the last thing you want to do is make it fresh again.
- The person calling you might be a scam artist. Debt collection scams exist, so make sure you don’t end up paying a fake debt collector money that you don’t actually owe. Never make a payment or give out personal information over the phone, including information about the debt.
The Federal Trade Commission suggests telling the debt collector that you aren’t going to discuss any debts until you receive your written validation notice. Debt collectors are required to provide you with a written notice within five days after first contacting you about a debt. This notice will include the name of the original creditor and the amount owed. The validation notice will also include your rights under the federal Fair Debt Collection Practices Act, including the fact that you have the legal right to dispute the debt.
“It’s critical to verify the information. Just as a creditor sold the debt to a debt collector to begin with, one debt collector may have sold the debt on to another. Along the way, errors could be made. A consumer should verify, at the least, that the debt does belong to them,” continues Micheletti.
You also have the right to send a “cease communication” letter to the collection agency. After you’ve sent this letter, the agency must stop calling you about your debt. At this point, the debt collector is only allowed to contact you for two reasons: to confirm that it has received the letter and will stop contacting you or to inform you about a specific action it is taking against you (such as filing a lawsuit).
When will a debt collector sue?
Typically, debt collectors will only pursue legal action when the amount owed is in excess of $5,000, but they can sue for less.
“If they do sue, you need to show up at court,” says Lewis-Parks. “If you don’t show up, the court will probably issue a judgment against you for the amount that the debt collector is suing you for. The debt collector can also attempt to find out where you work and garnish your wages. They can try to find out where you bank too, and freeze your accounts.”
Any court judgments will be added to your credit report and remain there for seven years, even if you pay the judgment, says Lewis-Parks.
If you discover that you have a judgment against you, it’s a good idea to speak with a consumer law attorney to determine what rights you may have and whether you can get the judgment removed.
Should you pay your debts after the statute of limitations has expired?
If you have an old credit card debt that has fallen outside of the statute of limitations, should you pay it? There are varying opinions on this question. Some people argue that once a debt is no longer within the statute of limitations, it doesn’t need to be paid off. Others feel a moral obligation to pay off all of their outstanding debts, even if they can no longer be sued for failure to pay. There’s also credit score impacts to consider.
“If you don’t make payments on your debt, it can still affect your credit for up to seven years regardless of when the statute ends,” says Katie Ross, education and development manager for American Consumer Credit Counseling. A big hit like this will affect your ability to qualify for personal loans, mortgages and credit cards.
Ross suggests coming up with a plan for repayment. But remember, if you start making payments again on old debt, the clock on the statute of limitations surrounding that debt restarts anew, opening you up to being sued for the money owed, so this approach should be considered carefully.
“I would never pay a debt after the statute of limitations has expired because legally I do not owe the money,” says Ash Exantus, director of financial education at BankMobile. “You should simply contest the debt if it’s on your credit report and begin building new credit.”
It’s also important to remember that when outstanding debt gets old enough, it falls off your credit report and will no longer be an issue. Most unpaid and delinquent debt disappears from your credit report after seven years — and if it doesn’t vanish on its own, you can ask the credit bureaus to remove your old debt from your credit history.
What if your credit card debt hasn’t expired yet?
If you have old credit card debt that is still within the statute of limitations, it’s a good idea to try to pay it off if you’re able. Consider transferring your old debt to a balance transfer credit card so you can use the card’s interest-free grace period to make payments on that balance. You can also look into credit card and debt relief programs.
“If you’re struggling to pay off your debt on your own, a nonprofit credit counseling agency may be able to help,” says Ross. “They can help you create a budget and may enroll you in a debt management program that can help you pay off debt faster and save a bit more money than you would if you tried to pay the debt off on your own.”
You should also be aware of your rights under the Fair Debt Collection Practices Act. According to the FTC, debt collectors are not allowed to call you after 9 p.m. or before 8 a.m., and they are not allowed to call your workplace if you have told them verbally or in writing that your employer does not allow such calls. Even if you have debt that is within the statute of limitations, you don’t have to deal with debt collector harassment.
Should you consider a debt consolidation loan?
Consumers have a number of options available to pay off outstanding debt, even if the debt has been sent to a collection agency. You can begin by initiating a conversation with the creditor or collection agency to establish a manageable repayment plan or to settle on a lower total amount owed. But if you’re not comfortable doing that, another option may be a type of personal loan known as a debt consolidation loan.
“A personal loan will generally offer a rate lower than credit cards,” says Micheletti. “A consumer could consolidate their credit card debt into one personal loan at the lower rate. If going this route, the consumer should use 100 percent of the proceeds from the loan to pay off outstanding debts in order for this option to be effective.”
No matter which route you choose, make sure you keep tabs on when your debt started and know your rights when it comes to debt collecting agencies.