How Long Can Creditors Try to Collect on a Debt?

Many people have personal experience with past due debts. The law of each state sets time limits on lawsuits by creditors seeking repayment, but local conditions, exceptions and rules can vary these deadlines. Federal and state law also regulates the actions of creditors in pursuit of payment, no matter when the debt was contracted. .

There are a wide variety of debts, but the "statute of limitations" deadlines written into state law recognize four general types: written contracts, oral contracts, promissory notes and open-ended accounts. A promissory note is a document signed by a debtor as a promise to repay a loan of money -- for example, a mortgage note. An open-ended or revolving account allows the debtor to continue using a line of credit as long as the account remains in good standing. Credit-card accounts are typical open-ended accounts.

A statute of limitations refers to the limited time a creditor has to file suit to collect on a debt. This timeline varies by state and by type of debt. When collections fail, a creditor can petition a civil court for a judgment against the debtor. Once the judgment issues, the creditor can enforce his claim by various legal means, including garnishment of wages, levy of bank accounts and liens on property. In addition, a creditor can ask for a writ that allows him to repossess property that serves as security for a loan.

A creditor can, in theory, file suit against a debtor past the statute of limitations. The defendant must file an answer to the suit to claim that debt is too old to be collected. If he ignores the complaint and summons issued by the court, the creditor can then ask for a summary finding by the court that the debtor has defaulted and the debt is owed. Without evidence provided by the defendant that the statute has passed, the court will go along with that request, and a judgment will issue. That's why simply ignoring creditors almost never makes them go away.

The statute of limitations refers to claims filed in court, not to collection actions. Thus, creditors can continue calling, writing and harassing a debtor, no matter how old the debt is, as long as they stay within the bounds of state law and the federal Fair Debt Collections Practices Act in doing so. The only situation that suspends the right of creditors to pursue collection is the debtor's filing a petition for bankruptcy protection. While the bankruptcy is pending, the creditor is barred from any contact with the debtor.