Ask Stacy — Is There a Statute of Limitations on Debt?

Photo by Stuart Miles / Shutterstock.com

You probably know that if you owe money, the company you owe can do lots of things to try to collect it — like damaging your credit score, sending a collection agency after you and suing you in court. But can they come after you for the rest of your life?

Nothing lasts forever. Nearly all transgressions in our society have a limit beyond which those doing the pursuing have to give it up. It’s called the “statute of limitations.” While there are a few crimes that don’t have one — murder, for example — debt does. Here’s today’s reader question:

I have an old catalog debt that was placed into collections. This debt has finally been removed from my credit reports for a few years now from all three credit bureaus. Yet I have recently started getting letters again from a collection agency regarding this debt. To the best of my knowledge, this account is also past the Florida statute of limitations. What should I do about this? Is there a time frame when they can no longer harass you for payment?

If I start paying on it again, will it be placed back onto my credit report? (I don’t want it placed back on my credit report. I’ve worked hard getting my credit back in good standing.) Should I pay it off? Or should I just ignore the situation?

Any advice you can offer would help me a lot. Thank you so much. – Tammy

Here’s the deal, Tammy:

While there’s nothing barring a company from attempting to collect forever, their legal remedies do expire, and those are defined by the laws in your state. To find the statute of limitations on debt, check out this chart from CreditInfoCenter.com, or this one from BCSalliance.com. In Florida, they have four years to collect a bad debt for “open accounts” — the category that includes credit card debt.

But just because they can’t win in court doesn’t mean they can’t sue. Nor does the statute of limitations prevent them from calling you, sending you letters or otherwise trying to get you to pay. In fact, this practice is quite common. Collection agencies and law firms routinely buy old debts for pennies on the dollar and attempt to collect them. And they’re certainly not above saying or doing just about anything to get you back on the hook.

Tread carefully

The laws regarding debt collection are tricky. For example, there are states that allow otherwise legally noncollectable debts to be reinstated if the consumer makes a payment — or even acknowledges the debt.

Keep in mind that after the statute of limitations expires, unless the debt has been charged off or discharged in bankruptcy, you still owe the money. In other words, the statute of limitations doesn’t wipe out the debt, it just reduces the legal remedies available to collect it.

So if you find yourself in this situation, the smart move is to call a consumer lawyer (you can find one at the National Association of Consumer Advocates’ website) and ask the attorney what to do.

Do this before responding in any way to any collection notice or other contact from a collection agency. Otherwise, you might inadvertently make yourself liable for an old debt.

Your credit report

What shows up on your credit report is determined not by state but federal law. The three credit reporting agencies (Experian, TransUnion and Equifax) have to remove most negative information after seven years. Bankruptcies can remain on your report for up to 10 years, and there are some other, less common debts, like unpaid taxes and child support, that can remain on your report indefinitely.

The seven-year period normally begins 180 days after the debt becomes delinquent — the day you first missed a payment. But if you start once again making payments, the debt could reappear.

Here’s what to do

There are plenty of places to learn more. This page of the FTC site is a good place to start. You can also ask a credit counselor for free advice. But no matter how much you read and think you understand, I’d still advise at least talking to a lawyer. The more money at stake, the more important this becomes.

You should also know there are scenarios in which you might be able to get an attorney without paying for one. Check out “What to Do If The Debt Collector Comes Calling.”

While I’m all for do-it-yourself solutions for everything from remodeling to making a will, this area is too much of a minefield to go it alone. It’s a complex topic, and reading simple stuff online probably won’t answer all of your questions or completely put you at ease. However, talking to someone who does this for a living will.

Got a question you’d like answered?

You can ask a question simply by hitting “reply” to our email newsletter. If you’re not subscribed, fix that right now by clicking here. The questions I’m likeliest to answer are those that will interest other readers. In other words, don’t ask for super-specific advice that applies only to you. And if I don’t get to your question, promise not to hate me. I do my best, but I get a lot more questions than I have time to answer.

About me

I founded Money Talks News in 1991. I’m a CPA, and have also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate. If you’ve got some time to kill, you can learn more about me here.

Got more money questions? Browse lots more Ask Stacy answers here.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
8 Things You Should Never Put in a Microwave
8 Things You Should Never Put in a Microwave

A microwave can be a busy cook’s best friend. But heating certain things in a microwave can cause disaster.

The 5 Worst Home Upgrades for the Money
The 5 Worst Home Upgrades for the Money

These home improvement projects basically never pay off.

15 Painless Ways You Can Cut Costs in 2021
15 Painless Ways You Can Cut Costs in 2021

Follow these tips to save, so you’ll have money for things that really matter.

These 12 Reusable Products Save You Money Over and Over
These 12 Reusable Products Save You Money Over and Over

Buy reusable versions of these household items, and you won’t have to spend another dime on them for years.

17 Amazon Finds Under $20 That Will Organize Your Life
17 Amazon Finds Under $20 That Will Organize Your Life

We’ve rounded up must-have products to help you get your ducks in a row.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

Whether you resell it for a big profit or add it to your own wardrobe, this type of clothing is a hidden steal.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

Organize Your Home With These 10 Thrift Store Finds
Organize Your Home With These 10 Thrift Store Finds

Resolve to be clutter-free in 2021 with these secondhand purchases.

11 Laws You Could Be Breaking Without Knowing It
11 Laws You Could Be Breaking Without Knowing It

Seriously? Fibbing about the weather is a crime? This and other little-known legal traps await the unwary.

Is This Treatable Condition Causing Your High Blood Pressure?
Is This Treatable Condition Causing Your High Blood Pressure?

Researchers say too many doctors are overlooking this potential source of hypertension.

13 Things Seniors Can Get for Free — or Almost Free
13 Things Seniors Can Get for Free — or Almost Free

There are many ways to get cheap or free services and goods after reaching a certain age.

Taking a Multivitamin? Here’s Why You Should Reconsider
Taking a Multivitamin? Here’s Why You Should Reconsider

A new study has bad news for the millions of Americans who spend money on multivitamins.

21 Items to Cut From Your Budget That You Won’t Even Miss
21 Items to Cut From Your Budget That You Won’t Even Miss

Start off the new year by implementing these small-but-smart savings strategies. They’ll soon add up.

These 10 Postal Price Hikes Start Next Week
These 10 Postal Price Hikes Start Next Week

Starting on Jan. 24, the price of various mail and shipping services will rise.

Internet Providers Can’t Charge You for This Anymore
Internet Providers Can’t Charge You for This Anymore

Starting this month, your ISP no longer can bill you for this fee.

10 Cars You Are Most Likely to Keep for 15 Years
10 Cars You Are Most Likely to Keep for 15 Years

The cars that owners hold onto the longest have one thing in common, a new study shows.

This Surprise Factor Can Raise Your Risk of Dementia
This Surprise Factor Can Raise Your Risk of Dementia

Nearly half of U.S. residents may face this threat.

Prepare to Pay More for These 31 Drugs in 2021
Prepare to Pay More for These 31 Drugs in 2021

More than 700 prescription medications have seen price hikes so far this year. Here’s a look at the worst.

5 States Lowering Taxes This Year and 2 Raising Them
5 States Lowering Taxes This Year and 2 Raising Them

State personal income tax rates, brackets and deductions just changed in these places.

The 10 Golden Rules of Becoming a Millionaire
The 10 Golden Rules of Becoming a Millionaire

I’m a millionaire several times over. I got here the same way you can — by following these simple steps.

7 Tricks to Cleaning Your Bathroom Faster
7 Tricks to Cleaning Your Bathroom Faster

These tips can get your bathroom sparkling with little time and no elbow grease.

11 Huge Retirement Costs That Are Often Overlooked
11 Huge Retirement Costs That Are Often Overlooked

Does your retirement budget account for all of these costs?

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.