Statute of Limitations on Debt

Consumers often pay off debt for which creditors can no longer seek legal action because the Statute of Limitations has already expired for the account. Consumers pay off these accounts perhaps because the accounts still appear on their credit reports, they fear court action, or they simply don’t know their rights.  There are even cases of “Zombie debt” where agencies are claiming to collect a debt from years ago that one may have already paid off, or never owed in the first place.

Know the Statute of Limitations for your state or the state where a potential creditor is based.  The chart below provides links to various state laws.

 

STATUTE OF LIMITATIONS ON DEBT; STATE BY STATE

State	Oral	Written	Promissory	Open-ended Accounts	State Statute: Open Accounts
AL	6	6	6	3	§6-2-37
AR	5	5	5	3	§16-56-105
AK	6	6	3	3	§09.10.053
AZ	3	6	6	3	§12-543
CA	2	4	4	4	§337
CO	6	6	6	3	§13-80-101
CT	3	6	6	3	§52-581
DE	3	3	3	4	§2-725
DC	3	3	3	3	§12-301
FL	4	5	5	4	§95.11
GA	4	6	6	6 **	§9-3-25
HI	6	6	6	6	HRS 657-1(4)
IA	5	10	5	5	§614.5
ID	4	5	5	4	§5-222
IL	5	10	10	5	735 ILCS 5/13-205
IN	6	10	10	6	§34-11-2
KS	3	6	5	3	§84-3-118
KY	5	15	15	5	§413.120
LA	10	10	10	3	§3-118
ME	6	6	6	6	§5-511
MD	3	3	6	3	§5-101
MA	6	6	6	6	c.260, §2
MI	6	6	6	6	§600.5807
MN	6	6	6	6	§541.05
MO	5	10	10	5	§516.120
MS	3	3	3	3	§15-1-29
MT	3	8	8	5	27-2-202
NC	3	3	5	3	§1-52(1)
ND	6	6	6	6	28-01-16
NE	4	5	5	4	§25-206
NH	3	3	6	3	382-A:3-118
NJ	6	6	6	3	25:1-5
NM	4	6	6	4	§37-1-4
NV	4	6	3	4	NRS 11.190
NY	6	6	6	6	§2-213
OH	6	15	15	6	§2305.07
OK	3	5	5	3	§12-3-95
OR	6	6	6	6	§12.080
PA	4	4	4	4	§5525
RI	10	5	6	4	§6A-2-725
SC	3	3	3	3	SEC 15-3-530
SD	6	6	6	6	§15-2-13
TN	6	6	6	6	28-3-109
TX	4	4	4	4	§16.004
UT	4	6	6	4	70-09a
VA	3	5	6	3	8.01-246
VT	6	6	5	3	§3-118
WA	3	6	6	3	RCW 4.16.080
WI	6	6	10	6	893.43
WV	5	10	6	5	§55-2-6
WY	8	10	10	8	§1-3-102

** Georgia Court of Appeals came out with a decision on January 24, 2008 in Hill v. American Express that in Georgia the statute of limitations on a credit card is six years after the amount becomes due and payable

Beware of “Zombie” Debt Collectors

Beware of calls from “zombie” debt collectors. These are bill collectors that try to get people to pay money on debts that were allegedly incurred 10, 15 or even 20 years ago. I received such a call today from a Christian Gable of National Action Financial Services (Phone: 866-529-1885). They claimed I owed money on a department store credit card opened in 1988. They said the bill was last paid in 1989. I told them I definitely did NOT owe money on the account — and that even if I did, the statute of limitations has long since expired. Can you believe they had the audacity to call and claim I owed money on a credit card from 20 YEARS AGO?!? Needless to say, I was not going to stand for this. At first, two different reps from this debt collection company literally hung up the phone on me when I told them I was a financial expert and knew my rights under the law, and that they should not be trying to scare people into paying alleged old debts. Finally, (after I called back a third time), I told a “Mr. Johnson” at the company that if they didn’t take my name off their list, or if they called me ever again, I would be reporting them to the authorities. His reply: “I understand …. We’ve already removed your name.”
Under federal law, any bill collector who sues you or even threatens to sue you after the statute of limitations has expired on a debt is in violation of the Fair Debt Collection Practices Act. Here’s the lesson: don’t be bullied into paying old bills from zombie debt collectors who come back from the grave, trying to intimidate or scare you into paying debts you may not have even had — and certainly don’t have any legal obligation to pay if the statute of limitations has run. Each state has different statutes of limitations for past-due debts, depending on if the debt was based on a written contract, an oral contract, a promissory note, or an open account. Credit cards are usually categorized as open accounts. The statute of limitations for credit card debt ranges from 3 to 10 years, based on where you live. To check the statute of limitations on debts in your state, contact your State Attorney General’s Office or go to www.naag.org and click “The Attorneys General”.

Tell me  your Zombie horror stories.