Why the Statute of Limitations on Debt Matters for Borrowers
If you’ve ever fallen behind on bills, you’re definitely not the only one. Life throws curveballs—people lose jobs, unexpected medical issues pop up, and businesses can close their doors. When that happens, debts often end up unpaid. Before you know it, you might have accounts in collections or even some legal judgments against you.
But here’s the bright side: you have rights! One of the key ones is the statute of limitations on debt. This is the time limit creditors or debt collectors have to take you to court. Once that time runs out, they can’t force you to pay through a lawsuit—even though they might still try to collect in other ways.
In this guide, we’ll break down everything you need to know about the statute of limitations on debt, how it affects judgments, what it means for your credit report, and—most importantly—how you can still get a mortgage with Gustan Cho Associates, even if you have some old unpaid debts hanging around.
What Is the Statute of Limitations on Debt?
The statute of limitations on debt refers to the period during which a lender can initiate a lawsuit to recover the money you owe. If they miss that deadline, they can’t get a court order to make you pay. This time frame usually ranges from 3 to 10 years and can vary depending on a few things.
How long the statute lasts depends on what type of debt it is, like credit card bills, medical expenses, written contracts, or if there’s already a judgment against you. Different states have different laws, so what applies in one place might not be the same in another.
For example, if your credit card company has a 6-year limit in your state and your last payment was in 2018, they can’t sue you after 2024
Worried About Debt or Judgments? Know the Statute of Limitations
Understand how the statute of limitations affects your debt and what you can do to resolve it.
How Long Can Debt Collectors Sue You? (State-by-State Statute of Limitations on Debt)
One of the most common borrower questions is: “How long can debt collectors sue me?” The answer depends on where you live.
Here’s a general breakdown of the statute of limitations on debt by state (for credit card and written contracts, which are the most common types of consumer debt):
- 3 Years: Alabama, Alaska, Arizona, Arkansas, Delaware, Washington D.C., Maryland, Mississippi, North Carolina, South Carolina
- 4 Years: California, Florida, Nevada, New Mexico, Texas, Utah, West Virginia
- 5 Years: Kentucky, Louisiana, Missouri, Montana, Virginia, Wyoming
- 6 Years: Colorado, Connecticut, Georgia, Illinois, Indiana, Iowa, Kansas, Maine, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, New York, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, Vermont, Washington, Wisconsin
- 10 Years: Some states extend the period for written contracts or judgments, such as Illinois (judgments), Rhode Island, and West Virginia.
Important: This chart is for general reference only. Always check your specific state laws or talk to a lawyer before making financial decisions.
Does the Statute of Limitations on Debt Erase the Debt?
Many borrowers think that once the statute of limitations on debt expires, the debt goes away. Unfortunately, that’s not true.
Even after the statute of limitations expires, the debt remains, and collectors can continue contacting you through calls or letters.
However, they cannot legally initiate a lawsuit or garnish your wages once this time frame has passed. It’s important to note that making any payment, even as little as one dollar, can reset the statute of limitations, potentially reviving the collector’s ability to take legal action.
Tip: If you’re unsure whether your debt is past the statute of limitations, don’t make any payments until you know for sure.
What Happens to Your Credit Report When Debt Expires?
The statute of limitations on debt differs from the timeline for credit reporting. Negative entries such as late payments, collections, and charge-offs can remain on your credit report for up to 7 years from the date of last activity (DLA). Additionally, judgments are also reported for 7 years, while bankruptcies may stay on record for 7 to 10 years. Tax liens can have an even longer impact, remaining on credit reports for as long as 15 years.
Example: If your statute of limitations on a debt is 6 years, but the credit bureau allows reporting for 7 years, the debt could still show up on your report for another year after the legal collection period ends.
This is why some borrowers get confused—their credit reports may show old debts even if the statute of limitations has expired.
Does Filing Bankruptcy or Waiting Out the Statute of Limitations Make More Sense?
If you’re dealing with overwhelming debt, you might find yourself contemplating whether to file for bankruptcy or to wait out the statute of limitations on your debts. In cases where the debts are relatively small and nearing expiration, waiting may be a viable option.
However, if you’re facing multiple debts, have judgments against you, or are at risk of wage garnishment, filing for bankruptcy could be the more strategic choice.
At Gustan Cho Associates, we see both cases. Some borrowers can wait, while others need a clean slate. Our mortgage team can help you decide what’s best for your long-term homeownership goals.
Do You Know the Statute of Limitations on Your Debt or Judgment?
Learn the time limits on debt collections and how it impacts your financial future.
How Collection Agencies Try to Collect Before the Statute of Limitations Expires
Debt collectors know the clock is ticking. Before the statute of limitations on debt runs out, they may:
- Call you repeatedly
- Send letters demanding payment
- Offer to settle for less
- File a lawsuit in court to get a judgment
If they get a judgment before the statute runs out, that judgment can last 10 years or more—and in many states, it can be renewed.
Judgments, Tax Liens, and Debts That Don’t Expire
Not all debts fall under the statute of limitations. Some debts never go away until they are paid:
Federal Student Loans
Federal student loans are different from other types of debt because they never disappear on their own. You must pay them back completely and are responsible for them until they are paid off or discharged under certain circumstances. If you miss payments, you can face serious consequences, such as having part of your wages taken or your credit score dropping.
Child Support
Child support payments usually don’t have a set time limit, so they keep going unless a court decides to end them. Parents have to financially support their kids. Not making those payments can lead to serious consequences, like having your income taken directly or even facing jail time for not complying.
Certain Taxes (state and federal income tax)
Tax debts, such as state and federal income taxes, do not fall under any statute of limitations for collection. If you owe taxes, the government can pursue collection at any time, including garnishing wages and placing liens on property. It’s crucial to address any tax liabilities promptly to avoid long-term financial consequences.
Judgments have varying durations depending on the state, with most allowing them to remain in effect for up to 10 years. After this period, creditors have the option to renew judgments that have expired. It’s important to note that even if a judgment is no longer visible on your credit report after seven years, the creditor may still pursue collection efforts if they choose to renew it.
Mortgage Impact: Can You Get Approved With Expired Debts or Judgments?
Many borrowers ask, “Can I get a mortgage if I have debts past the statute of limitations?”
The answer is yes—especially with Gustan Cho Associates.
Collections & Charge-offs
Many lenders allow borrowers to qualify for FHA, VA, or conventional loans without paying off collections or charge-offs. These debts typically won’t affect your mortgage application, though some lenders may impose additional requirements, known as lender overlays. It’s essential to check with your lender about their specific policies regarding these types of debts.
Judgments & Tax Liens
If you have a written payment agreement for any judgments or tax liens, you can often still qualify for a mortgage, provided you’ve made at least three on-time payments. This shows lenders that you are committed to resolving these issues, which can work in your favor during the approval process. Be sure to maintain clear documentation of your payment history for a smoother application experience.
Expired Debts
When the statute of limitations on a debt has expired, you are no longer legally obligated to make payments on it. Lenders like Gustan Cho Associates recognize this and won’t require you to settle these obligations to qualify for a mortgage. This helps out borrowers who might be worried that their financial history will hold them back from getting a loan.
Unlike most banks, we have no lender overlays. That means we follow the actual agency guidelines, not stricter rules. Over 80% of our borrowers come to us after being denied elsewhere. Call Gustan Cho Associates at 800-900-8569, or email us at gcho@gustancho.com.
How Long Can Creditors Pursue Debt and Judgments?
Understand the time limits and how to protect yourself from collections and judgments.
Protecting Yourself: What to Do If You’re Contacted About Old Debt
If a collector calls you about old debt, follow these steps:
- Don’t admit to owing the debt right away.
- Ask for validation in writing.
- Look up how long you have to deal with debt in your state before the law kicks in.
- Do not make a payment if you suspect the debt has expired.
- Consult with a lawyer if you’re unsure.
Key Takeaways for Borrowers
- The statute of limitations on debt is the legal time limit for creditors to sue.
- It ranges from 3 to 10 years, depending on your state and the type of debt.
- Expired debt still shows on your credit report for up to 7 years.
- Some debts (taxes, child support, student loans) don’t expire.
- You can still qualify for a mortgage—even with old debts, judgments, or collections—with Gustan Cho Associates, because we have no lender overlays.
Work With Experts Who Understand Debt and Mortgages
At Gustan Cho Associates, we know that life happens. Many of our borrowers have faced collections, judgments, and bankruptcies, but we help them become homeowners again.
Borrowers who need a five-star national mortgage company licensed in 50 states with no overlays and who are experts on statute of limitation on debts, please contact us at 800-900-8569, text us for a faster response, or email us at alex@gustancho.com. The team at Gustan Cho Associates is available 7 days a week, on evenings, weekends, and holidays.
Frequently Asked Questions About Statute of Limitations on Debt:
Q: What is the Statute of Limitations on Debt?
A: The statute of limitations on debt is the legal time limit a creditor or debt collector has to sue you in court for unpaid debt. Once this time runs out, they can no longer take legal action to force payment. The debt is still on the books, and collectors can keep reaching out or reporting it to the credit agencies until the seven-year mark hits.
Q: How Long Can Debt Collectors Pursue You After the Statute of Limitations on Debt Expires?
A: Collectors may keep trying to contact you, but they cannot sue once the statute of limitations on debt has expired.
Q: Does Making a Small Payment Restart the Statute of Limitations on Debt?
A: Yes. Even a $5 payment can reset the clock, giving creditors more time to sue.
Q: Is the Statute of Limitations the Same in Every State?
A: No. Each state sets its own laws. It can be between 3 and 10 years.
Q: Can You Qualify for FHA or VA Loans with Old Collections Past the Statute of Limitations?
A: Yes. At Gustan Cho Associates, unpaid collections and charge-offs don’t need to be paid off to qualify for FHA or VA loans.
Q: Do Credit Bureaus Remove Debt When the Statute of Limitations Ends?
A: No. Credit bureaus follow the 7-year reporting rule, not the legal statute of limitations.
This blog about “Statute of Limitations on Debt and Judgments” was updated on September 9th, 2025.
Statute of Limitations on Debt and Judgments: What You Need to Know
Discover your rights and what creditors can or cannot do once the statute of limitations has passed.
Hi:I live in Florida. AmEx had a judgement against me in 2018. They didn’t pursue the judgment then wrote-off the debt just last month. Now a new debt collector says they bought the debt. Can the new debt collector move on the AmEx judgment, or do they have to go to take me to court? And if so how does the SOL play out? My last payment was in 2014.Thanks,Joe T
Statute of limitations are normally 10 to 20 years depending on the state. I think in Florida, it may be 20 years. The judgment creditor has the option to renew the judgment after it runs its statute of limitations for another 20 years. If you were issued a judgment, that judgment can be sold and the owner of the judgment can just let it sit and/or try to enforce the judgment. You cannot qualify for any mortgage with an outstanding judgment. You either need to pay the outstanding judgment and/or enter into a written payment agreement. Feel free to contact us at 272-716-8151 or text us for a faster response. Or email us at gcho@gustancho.com.