Debt Collection Limitations
In most cases, the statute of limitations for a debt will have passed after 10 years. This means a debt collector may still attempt to pursue it (and you technically do still owe it), but they can’t typically take legal action against you.
In California, there is generally a four-year limit for filing a lawsuit to collect a debt based on a written agreement. This means that for unsecured common debts like credit card debt, lenders cannot attempt to collect debts that are more than four years past due.
Under the Fair Credit Reporting Act, debts can appear on your credit report generally for seven years and in a few cases, longer than that.
Debt collectors can try to get you to pay the debt by sending you letters or calling you as long as they do not violate the law when doing so. They can’t sue or threaten to sue you if the statute of limitations has passed.
The statute of limitations for most debts starts when you go into default. If a debt is 10 years old but you were making payments until three years ago, the debt is likely still within the statute of limitations and can be pursued by a debt collector.
If you do not make any payment to your creditor for six years or acknowledge the debt in writing then the debt becomes ‘statute barred’. This means that your creditors cannot legally pursue the debt through the courts.
For most debts, the time limit is 6 years since you last wrote to them or made a payment.
Can the Statute of Limitations Be Restarted?
A debtor can ask for the written debt validation letter to identify the debt when getting debt collection calls from debt collectors. This will not reset the debt clock of old debts.
If the credit account was closed by the issuer, you may need to call customer service to find out if it can be reopened. If it was closed for inactivity, you may be able to negotiate having it reopened by setting up a recurring charge.
Prescribed debt is old debt written off by credit providers. Many consumers have watched credit scores suffer from debt collectors reporting old debts as new without realizing they can fight back and hold collectors accountable for violating rights.
To know if a collector illegally re-ages a debt, understand how long debts stay on credit reports. Three key dates:
- Account open date when opened
- Date of first activity when first used
- Date of last activity – last payment or use
The Fair Debt Collection Practices Act limits how agencies collect debt to prevent abuse, unfairness and deception.
A skilled attorney explains debt collection laws and consumer rights in Ohio. They can review options, including if bankruptcy enables permanent debt discharge. Ohio’s statute of limitations is six years regardless of debt type, with some exceptions.
Some believe collection restarts the six-year statute of limitations for private debt collection in Virginia, but payments or agreements don’t restart the credit report’s seven-year negative information period. Paying the original creditor instead of the agency won’t impact the statute of limitations.
Managing and Understanding Your Debt
Collections affect credit. Negative information stays seven years maximum; nothing restarts this. Some state statutes of limitations exceed seven years, so debts may still be reported or expired statutes. Rely on records to track debt dates and communications.
Under the Consumer Credit Act, debt can be sold anytime after you stop paying as part of normal collection. This applies to most consumer debts. Banks bundle and repackage debt then sell it to investors through a process called securitization.
Every state statute of limitations gives collectors four to six years after the last payment to sue for debts. After seven years, unpaid credit card debt is erased from credit reports, ending late payment damage, but creditors can still sue and courts may force payment. California judgments last ten years, extendable by ten more.