Debt Statute of Limitations

When discussing the Debt Statute of Limitations (SoL), it is
important to understand exactly what it means. In every state, and
the District of Columbia, there is a specific amount of time in
which a creditor or collector may file suit to recover a debt. This
is the Debt Statute of Limitations, and it varies fairly widely
from state to state.

Note that the Debt Statute of Limitations only applies to filing
a suit. The original creditor, a debt collection agency acting on
their behalf or the new owner of the debt may attempt to collect a
legally-incurred debt forever, in theory.

Definitions for the
table

Oral Contract: An oral agreement to pay back
money loaned (“handshake agreement”). A verbal contract, for most
things, is legal in every state.

Written Contract: An agreement to pay on a loan
under the terms written in a document, signed by at least two
parties.

Promissory Note: An agreement to pay on a loan
under the terms written in a document. The difference between a
promissory note and a regular written contract is that the
scheduled payments and interest on the loan also is spelled out in
the promissory note. A mortgage is an example of a promissory
note.

Open-ended Accounts: Revolving lines of credit
with varying balances. Credit cards are the most popular
example.

Debt Statute of
Limitations by State (in Years)