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Time-Barred Debt

A debt so old that the statute of limitations bars a lawsuit to collect it - what a collector may and may not do about it, how a payment can revive it, and why the credit-reporting clock is a different clock.

Informational only - this is not legal advice. These definitions explain general legal vocabulary in plain English. They are not advice about your situation, reading them creates no attorney-client relationship, and the law differs from state to state and changes over time. For advice you can rely on, speak to a lawyer licensed in your state.

What it means

A debt does not disappear when its statute of limitations runs, but the creditor's ability to sue on it does. The limitation period for a contract or account claim is set by state law, runs from a date the state's rule defines - usually the last payment or the default - and varies between states and between kinds of debt. Once it has passed the debt is time-barred: the creditor or a debt buyer may still ask to be paid, but a lawsuit can be defeated by raising the limitation period as a defence. It is a defence, not an automatic bar: a consumer who ignores the summons and lets a default judgment enter has usually lost the point.

Federal regulation now prohibits a debt collector from suing or threatening to sue on a debt it knows or should know is time-barred, and a collector that does so violates the Fair Debt Collection Practices Act whether or not the consumer knew the debt was old. The Supreme Court has held, however, that filing a proof of claim for a time-barred debt in a consumer's bankruptcy is not a violation, because the bankruptcy process is designed to sort such claims out.

The trap is revival. In many states a partial payment, a written acknowledgment of the debt, or a new promise to pay restarts the limitation period, so a small "good faith" payment on a debt that was time-barred can make it collectible in full. Separately, the period during which a debt may appear on a credit report is set by federal law and runs independently of the state limitation period; a debt can be time-barred but still reportable, and reportable long after it could be sued on.

Where this comes from

Limitation periods for debt are state statutes and differ by state and by kind of claim; whether payment or acknowledgment revives a barred debt is also state law. Regulation F, 12 C.F.R. § 1006.26(b), prohibits a debt collector from bringing or threatening to bring a legal action on a debt the collector knows or should know is time-barred, under the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692e and 1692f. Midland Funding, LLC v. Johnson, 581 U.S. 224 (2017), holds that filing a proof of claim on a time-barred debt in a Chapter 13 case does not violate the Act. The credit reporting period is set by the Fair Credit Reporting Act, 15 U.S.C. § 1681c.

When people hire a lawyer for this

Anyone contacted about an old debt should find out, before paying or promising anything, whether it is time-barred in their state and whether a payment would revive it - a legal aid office or a consumer lawyer can answer that from the dates. Anyone sued on an old debt should answer the lawsuit and raise the limitation defence, since it is lost by default; and a consumer who was threatened with suit on a barred debt may have a claim of their own under the federal statute.

Find a lawyer for this in your state

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Part of the LawyerLand plain-English legal glossary. Definitions are written from primary sources - statutes and court rules - and each entry states the authority it rests on, or says plainly when the doctrine is state law with no national rule.

If you cannot afford a lawyer, civil legal aid programmes provide free help with many of these problems: civil legal aid programmes by state.

Related free reference tools: statute of limitations for a personal-injury claim, by state, quoted from each state's official text - part of LawyerLand's legal reference tools.