Every state has a statute of limitations that determines the length of time a creditor has to file a lawsuit against a debtor. Once the statute of limitations is up, the debts are considered old debts, or "time-barred," and the creditor can't take legal action to recover the debts. However, it can still call and send letters asking you to pay. In Virginia, the statute of limitations varies depending on the type of debt.
Breach of Contract
In Virginia, an oral contract has a three-year statute of limitations. However, oral contracts, usually sealed with a handshake, are tough to prove in court. If the contract is signed in writing, the statute of limitations is five years. Auto loans, personal loans, cell phone contracts, medical bills and utility bills are examples of written contracts.
Credits cards are classified as open-ended accounts and have a three-year statute of limitations. An open-ended account allows you to repeatedly make purchases until you reach the specified limit. A home equity line of credit is another example of an open-ended account. The three-year clock begins ticking on the date of last payment or last charge.
Promissory notes act like written contracts, but have a longer statute of limitations. In Virginia, creditors have six years to file a lawsuit against you for an unpaid promissory note. A promissory note is a written promise to pay a debt. Unlike a written contract, a promissory note must include an amortization and payment schedule. The most common types of promissory notes are for mortgages and private student loans.
The statute of limitations gives creditors a limited number of years to sue. If a creditor files a lawsuit against you within the statute of limitations, it'll be up to the court to determine if you legitimately owe the debt. If a judgment is awarded, the creditor will have the right to collect the money owed by legal means, which may include a wage garnishment. Judgments obtained in a Virginia court are enforceable for 10 years. If the creditor goes back to court and requests an extension, an additional 10 years may be added, making it a total of 20 years to collect.
- Virginia Legislative Information System: § 8.01-246. Personal Actions Based on Contracts.
- Legal Match: Statute of Limitations for Breach of Contract Actions
- Consumer Financial Protection Bureau: My Lender Offered Me a Home Equity Line of Credit. What is a HELOC?
- Wallet Hub: Statutes of Limitations for Unpaid Loans, Bills & Taxes
- Protecting Consumer Rights: Virginia Statute of Limitations on Debt Collection
- Federal Trade Commission: Time-Barred Debts
- Nolo: Creditor Lawsuits
- Virginia Office of the Attorney General: Consumer Protection