What You Need to Know About the Statute of Limitations When it Comes to Credit Card Debt

If you have serious credit card debt, you may or may not have heard the term “statute of limitations” bandied about regarding debt. But regardless of whether you’ve heard the term in this context before or are just now hearing it for the first time, the juxtaposition of personal debt and a term most of us associate with criminal law is likely rather confusing, if not a bit unsettling.

So what exactly does a statue of limitations have to do with the money you owe, and how does it affect your situation? Let’s find out.

Statute of limitations for written contracts

While there are many different types of Statutes of Limitations (SOL), ranging all the way from those that apply to oral contracts to those applying to professional malpractice, libel and slander, when it comes to credit card companies, the statute we’re concerned with is the one for written contracts.

Each state has its own SOL, which dictates the length of time you can successfully be sued for failing to pay back money that you owe to a creditor.

The clock, if you will, begins when you last make a payment toward your debt and runs for a state-specified period of time, ranging from three years in Alaska, D.C., Maryland, Mississippi, New Hampshire and the Carolinas to 15 years in Kentucky and Ohio.

The average SOL across all states is 6.35 years. Keep in mind, however, that the SOL clock may reset if you:

  • Make a payment toward your debt (all states)
  • Sign a document in which you acknowledge that you owe money in the first place (some states)
  • Sign a document in which you promise to pay back what you owe (some states)

You should therefore obviously avoid doing such things, unless they are part of an official, mutually beneficial payment plan reached between you and your creditor that removes the possibility of a lawsuit.

Your debt collection rights

Ok, but what happens if you’re about to get sued for failing to repay money you owe, or this has already happened? What rights and recourses do you have then?

Well, the first thing you need to know is that debt collectors are not legally allowed to threaten a lawsuit unless one is seriously being considered. Second, you not only have the right to dispute your debt, but you can also sue debt collectors in state or federal court if the situation warrants it. Third, while time may be on your side, you have to speak up for it to really matter. In other words, you can still be sued even after the statute of limitations expires, but the lawsuit will be dismissed if you prove to the court that your debt is older than your state’s statute of limitations.

Other than that, you don’t have many concrete rights, but it is important to keep in mind that:

  • The SOL of your state of residence at the time you entered into the contract with the credit card company will typically apply.
  • If you entered into a credit card agreement while living in a state with a short SOL, then moved to a state with a long SOL and were subsequently sued for outstanding charges, you will be able to make a compelling argument that the shorter SOL should apply, as you entered into the contract with the understanding that it would be legally relevant only for that particular period of time.

Is it a good idea to wait out the statute of limitations for debt?

Ultimately, we only suggest waiting out the statute of limitations for debt you are unable to repay if you have exhausted all other options. If your creditor will not accept any deal that you can afford (DO NOT agree to any payment plan that you cannot sustain comfortably), and you have a large amount of unsecured debt, then a consultation with a bankruptcy attorney may be the logical next step. If that proves fruitless, only then might waiting out your state’s statute be your best bet.

Should waiting out the statute of limitations for debt be the road you end up taking, make sure to stick to your guns and know that you have rights because debt collectors will likely try every trick in the book to induce a payment and reset the statute of limitations clock.

Odysseas Papadimitriou is CEO of Card Hub, a leading online marketplace for second chance credit cards, secured credit cards, and debt help.


  • So many people don’t know about the concept of statute of limitations. And those that do have no idea how to find out for their particular card or state. Guess that would be a good idea for a new topic. :)

  • The intent of bringing out the statute of limitations is to help keep the consumer away from the unfair practices(which now are bordering on harassment). Sometimes the tactic used is if the consumer points out that the SOL has passed on the debt, they agree they owe the debt and that resets it. Knowing our rights helps us better than we’d think.

  • I think the best limitation a person can have with a credit card it just not having one.

  • Why consult with a bankruptcy attorney? Statue of limitations is often shorter than the length a bankruptcy will remain on your credit report. You also won’t have the negative stigma of a bankruptcy for the rest of your life.

    • I think bankruptcy should be a last resort — only if there’s no other way to pay off your debt. (Do you mean an emotional stigma though?)

  • @ Jackie, I agree that bankruptcy is over used. Unfortunately, the quality of collection defense varies widely. Many lawyers simply negotiate a surrender without intending to defend the lawsuit. I rarely see consumers win collection lawsuits and have read many adverse opinions where consumers lost on the statute of limitations. Statutes of limitations are specific to each state. In many states, the limitations period for “written contract” is not only one of the longest, it often is an incorrect choice. Oral arguments on the correct limitations period often requires an hour or two even with experienced lawyers representing each side. Consult with a lawyer who routinely defends collection cases in your state.