Still Dealing with Old Debt? Know your Rights
By Nemal Perera
creditguard.org
Posted June 29 2005, 5:27 PM EST
Every state has laws governing the time limitations in
which a person or entity can file suit to collect outstanding debt. Once
a debt passes beyond this time limitations of your state, a debt collector
no longer has the right to file charges on that particular debt. This law
is widely known as Statutes of Limitations.
Generally, a creditor gives up the right to file suit
after a period of 6 years from the time the debt first became delinquent.
However, many states have adopted their own limitations which can range anywhere
from 2 to 15 years.
Statutes of limitations are only limited to oral agreements,
promissory notes, open accounts, written contracts, mortgages, loans, auto
payments and foreign/domestic judgments. There are no statutes of limitations
on federal student loans, income taxes, fines and in some states past due
child support.
Which State Law Applies to me?
In general terms, if the creditor wants to file charges
against a particular customer, the creditor must file charges on a judicial
court where the customer resides. However, there are exceptions to this rule.
For instance,
If you live in Florida and you travel to New Jersey and
sign a contract (not revolving credit accounts) in that state, the creditor
can seek a judgment in the state where the contract was signed. In such a
case, you will be sued under New Jersey statute of limitations.
Child support orders are usually governed and enforced
in that particular state. If you have a child support order from New York
and you currently reside in Florida, you can be sued in New York State for
any outstanding delinquencies.
For all credit related contracts such as, mortgages, car
loans and etc, the creditor has the right to sue the customer in any state
they prefer. Under such situations, creditors always choose the state with
the longest statute of limitations or the state that grant the highest amount
of award.
What is my State's Statute of Limitations?
As we mentioned earlier, every state has it’s own
statute of limitations and it applies to every case differently. It is important
to keep in mind the creditor has the right to file suit against you even
if the statute of limitations has expired. In such a situation, you can ask
the residing judge to dismiss the case on the grounds that the statute of
limitations has expired.
The following table lists the number of years in which
various types of debt can be collected in each state. The information below
can be altered or changed by the states at any given time, so consult an
attorney before taking any legal actions.
Debt and Credit Terms
Open Accounts - These are revolving lines of credit with
varying credit limits and balances. For instance, credit cards, home equity
lines of credit and overdraft credit accounts can be identified as open accounts.
Written Contracts - The customer agrees to pay the loan
under the terms written in the loan document. This document has to be signed
by both parties (debtor and creditor) in order to be legally effective.
Promissory Notes - The document signed by a borrower
promising repayment of a loan. It shows the amount of monthly payments,
interest rate, first payment date, last payment date, and the late charge
and prepayment provisions. Mortgages, auto loans and student loans are prime
examples of promissory notes.
Oral Contracts - An unwritten agreement between two or
more parties. Oral contracts are just as binding as written contracts, providing
that sufficient proof of the contract exists.
Statutes of Limitations for Debt Collection
|
State
|
Open Accounts
|
Written Contract
|
Promissory Notes
|
Oral Contracts
|
Alabama
|
3
|
6
|
6
|
6
|
Alaska
|
6
|
6
|
6
|
6
|
Arizona
|
3
|
6
|
5
|
3
|
Arkansas
|
3
|
5
|
6
|
3
|
California
|
4
|
4
|
4
|
2
|
Colorado
|
6
|
6
|
6
|
6
|
Connecticut
|
6
|
6
|
6
|
3
|
Delaware
|
3
|
3
|
6
|
3
|
D.C
|
3
|
3
|
3
|
3
|
Florida
|
4
|
5
|
5
|
4
|
Georgia
|
4
|
6
|
6
|
4
|
Hawaii
|
6
|
6
|
6
|
6
|
Idaho
|
4
|
5
|
10
|
4
|
Illinois
|
5
|
10
|
6
|
5
|
Indiana
|
6
|
10
|
10
|
6
|
Iowa
|
5
|
10
|
5
|
5
|
Kansas
|
3
|
5
|
5
|
3
|
Kentucky
|
5
|
15
|
15
|
5
|
|
Louisiana
|
3
|
10
|
10
|
10
|
Maine
|
6
|
6
|
6
|
6
|
Maryland
|
3
|
3
|
6
|
3
|
Massachusetts
|
6
|
6
|
6
|
6
|
Michigan
|
6
|
6
|
6
|
6
|
Minnesota
|
6
|
6
|
6
|
6
|
Mississippi
|
3
|
3
|
3
|
3
|
Missouri
|
5
|
10
|
10
|
5
|
Montana
|
5
|
8
|
8
|
5
|
Nebraska
|
4
|
5
|
6
|
4
|
Nevada
|
4
|
6
|
3
|
4
|
New Hampshire
|
3
|
3
|
6
|
3
|
New Jersey
|
6
|
6
|
6
|
6
|
New Mexico
|
4
|
6
|
6
|
4
|
New York
|
6
|
6
|
6
|
6
|
North Carolina
|
3
|
3
|
5
|
3
|
North Dakota
|
6
|
6
|
6
|
6
|
Ohio
|
-
|
15
|
15
|
6
|
Oklahoma
|
3
|
5
|
5
|
3
|
Oregon
|
6
|
6
|
6
|
6
|
Pennsylvania
|
6
|
4
|
4
|
4
|
Rhode Island
|
10
|
10
|
10
|
10
|
South Carolina
|
3
|
3
|
3
|
3
|
South Dakota
|
6
|
6
|
6
|
6
|
Tennessee
|
6
|
6
|
6
|
6
|
Texas
|
4
|
4
|
4
|
4
|
Utah
|
4
|
6
|
6
|
4
|
Vermont
|
6
|
6
|
5
|
6
|
Virginia
|
3
|
5
|
6
|
3
|
Washington
|
3
|
6
|
6
|
3
|
West Virginia
|
5
|
10
|
6
|
5
|
Wisconsin
|
6
|
6
|
10
|
6
|
Wyoming
|
8
|
10
|
10
|
8
|
CreditGUARD of America is a non-profit credit counseling
agency that assists consumers through credit counseling and financial education.
Please visit our web site at www.creditguard.org or call 1-800-867-0406
for a free consultation with a certified credit counselor.
If you have any questions or comments regarding this press release, please contact Nemal Perera at
1-800-400-5844 Ext. 160 or email nemal@creditguard.org.
Copyright © 2005, CreditGUARD of America,
Inc.
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