Introduction
If you want to know how the legal system works, there are some basics that everyone should know. This information should be common knowledge to the average person in the United States and other countries abroad. One of the most important involves the term or law that refers to the ‘statute of limitations’. Thankfully, there is a wealth of information about this type of law online, and it can help people with having a broader understanding of what this actually means and how it applies to different situations and circumstances. Having said this, here are somethings that you should know.
Definition of Statute of Limitations
This is the law that determines a specific time period or limitation that a certain type of legal action can be brought up against an individual, organization, group or etc.
How does the statute of limitations pertain to Settling a debt
When anyone has to settle a debt account, there are some limitations that apply to both the creditor and the debtor. In fact, both sides have to abide by the law that says when a debt can be settled, particularly when addressing a certain prescribed time and when the creditor no longer has a right to pursue a legal remedy. Therefore, everyone needs to know their rights in each case and situation. In short, the statute of limitations governs how much time the debtor has to collect the amount owed. These laws established will also vary from one state to another. For instance, if the debt is made in the state of Texas, the statute of limitations in Texas is set to be 4 years. Simply put, if part or all of the debt that has not been collected in 4 years, the creditor loses their right to collect the amount due.
Why is it important to knows about the statute of limitations Information?
Today, the more information that you are armed with, the better. Particularly, when you are dealing with any kind of finances and any or all rights associated with it. In some cases, the knowledge that you acquire can save you a lot of money and trouble over the years. This is one of the main reasons why knowing as much as you can about the Statute of limitations by state and how it applies to certain situations can help you tremendously. In fact, there are several different scenarios that can help you, as the debtor, to protect yourself when the statute of limitations is or about to run out.
Scenario #1. – Your creditor is pursuing obtaining the payment of the debt from you in the 3rd year (3 years from the date that you opened up your account). In this case, you are obligated to pay the debt since it is within the statute. Therefore, if the creditor is trying to settle the amount for a certain amount, you may want to pay it to get rid of any problems that may incur.
Scenario #2. – Your creditor is pursuing obtaining the payment of the debt from you in the 4th year (4 years from the date that you opened up your account). In this case, you are still obligated to pay the debt since it is within the statute. Therefore, if the creditor is trying to settle the amount for a certain amount, you may want to pay it to get rid of any problems that may incur.
Scenario #3. – Your creditor is pursuing obtaining the payment of the debt from you after the 5th (5 years from the date that you opened up your account). In this case, you are not obligated to pay the debt since it is outside of the statute. Therefore, if the creditor is trying to settle the amount for a certain amount, you can pay the amount owed but you have no legal obligations to do so.
By understanding the statute of limitations and how it applies to your particular circumstances, you can make an informed decision that will help you to make the best decisions possible. This is usually the case when you have not had the capability to pay your debt and you are being pursued by creditors who may be trying to collect at the last hours.
Creditors Contacting You After 4 Years
Unfortunately, some creditors will use any tactic that they can to collect their debt from you. Therefore, you need to know what some of these tactics maybe if you are ever approached. Even though some collection companies may never try to scam the public, there are some that will do anything to get their hands on the amount that their debtors owe including going outside of the law. When this is true, they are usually depending on the fact that the debtor does not know the law, especially when it comes to the statute of limitations. For instance, the creditor may attempt to collect the debt even when the debtor is not legally bound to pay it. Also, if they are successful in what they do, they can actually get the money out of the person that does not know the law exists or how it should apply in their situation.
On the other hand, when you are familiar with the law and how that particular debt is covered under the 4 years statute (Texas statute of limitations), you can refer them to the Fair Debt Collection Practice Act. In this act, it will let them know that is a violation according to this law. This means that they do not have a right to sue or collect the debt after this period of time. It is also important to note that there are some exceptions to this statute since it does not cover student loans and other government-funded that you have borrowed. This means that you need to do your research too or talk to an attorney to validate the same.
Statue of Limitations Chart
A debt collector no longer has a right to sue for payment, once a debt ages past the statue of limitations, on state by state basis. If a debt collector tries to take you to court for the debt past the statue of limitation, then they are in violation of the Fair Debt Collection Practice Act.
Remember this isn’t giving legal advice in anyway. This is for informational purposes only. Always consult with legal council.
The chart below shows each state’s statue of limitation for delinquent debt.
| State | Written Contract | Oral Contracts | Promissory notes | Open-end accounts (including credit cards |
| Alabama | 3 | 6 | 6 | 3 |
| Alaska | 3 | 6 | 3 | 3 |
| Arizona | 6 | 3 | 5 | 3 |
| Arkansas | 5 | 3 | 3 | 5 |
| California | 4 | 2 | 4 | 4 |
| Colorado | 6 | 6 | 6 | 6 |
| Connecticut | 6 | 3 | 6 | 6 |
| Delaware | 3 | 3 | 3 | 3 |
| D.C. | 3 | 3 | 3 | 3 |
| Florida | 5 | 4 | 5 | 4 |
| Georgia | 6 | 4 | 6 | 4 or 6 |
| Hawaii | 6 | 6 | 6 | 6 |
| Idaho | 5 | 4 | 5 | 5 |
| Illinois | 10 | 5 | 10 | 5 or 10 |
| Indiana | 10 | 6 | 10 | 6 |
| Iowa | 10 | 5 | 5 | 10 |
| Kansas | 3 | 3 | 3 | 3 |
| Kentucky | 15 | 5 | 15 | 5 or 15 |
| Louisiana | 3 | 10 | 10 | 3 |
| 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 | 5 | 5 | 5 |
| Montana | 8 | 5 | 8 | 8 |
| Nebraska | 4 | 4 | 4 | 4 |
| Nevada | 4 | 4 | 4 | 4 |
| New Hampshire | 3 | 3 | 3 | 3 |
| New Jersey | 6 | 6 | 6 | 6 |
| New Mexico | 4 | 4 | 4 | 4 |
| New York | 6 | 6 | 6 | 6 |
| North Carolina | 3 | 3 | 5 | 3 |
| North Dakota | 6 | 6 | 6 | 6 |
| Ohio | 6 | 6 | 6 | 6 |
| Oklahoma | 5 | 3 | 5 | 3 or 5 |
| Oregon | 6 | 6 | 6 | 6 |
| Pennsylvania | 4 | 4 | 4 | 4 |
| Rhode Island | 10 | 10 | 10 | 10 |
| South Carolina | 10 | 10 | 3 | 3 |
| South Dakota | 6 | 3 | 6 | 6 |
| Tennessee | 6 | 6 | 6 | 6 |
| *Texas* | 4 | 4 | 4 | 4 |
| Utah | 6 | 4 | 6 | 4 |
| Vermont | 5 | 3 | 6 | 3 |
| Virginia | 6 | 6 | 5 | 6 |
| Washington | 6 | 3 | 6 | 6 |
| West Virginia | 10 | 10 | 10 | 10 |
| Wisconsin | 6 | 6 | 10 | 6 |
| Wyoming | 10 | 8 | 10 | 8 |
Conclusion
The statute of limitations is information that everyone should know to equip themselves about the law. Since some of these laws affect you and your circumstances, you need to know how you can respond if the statute is and will be running out of debt that you owe. Each state has different limitations and they can vary based on where you live. By knowing how many years that a creditor can collect the amount that you owe, you will understand if they can legally sue you and when you are not legally bound to pay the amount due. Remember, always consult with your legal council.