What is the Statute of Limitations on Debt?


Debt Collection Past the Statute of Limitations

Debt collectors do not discriminate when it comes to collecting on a debt. However, the fact that a debt collector may contact an individual regarding a debt does not mean that the debt is legally collectible.

In fact, if a debt is past a certain “age,” the debt collector may not pursue a legal claim on that debt.

What is the Statute of Limitations?

Every state has laws that limit how long a person or entity has to bring a legal claim for a certain issue. These laws are known as statutes of limitations.

Debt collectors and original creditors are prohibited from legally pursuing a claim on a debt after the set deadline as governed by the state’s statute of limitations.

In Texas, the statute of limitations to collect on a debt is four years. This four-year limit includes written contracts, promissory notes, oral agreements, and open accounts, including credit card credit lines.

When does the Statute of Limitations Begin?

It is not always clear to determine when the clock begins to run for the statute of limitations. Normally, it starts when the account holder fails to make a payment. However, it can also depend on the type of debt and the specific state law.

Texas starts the clock as of the day the last payment was made on the account. This date is also referred to as the “date of last activity.”

This date of last activity is important since it governs the start of when the statute of limitations applies. Many debt collectors will be less than honest when it comes to reporting when the date of last activity actually is, hoping that the debtor will assume the information given to them is correct. It is for this reason that it is important the debtor request verification of the date of last activity from the debt collector or creditor.

Once that information has been provided, he or she should still verify the date independently to make sure the information given to him or her is correct.

The debtor has the right to contact the debt collector directly and request verification of the date of last activity via a certified letter or recorded phone call. This information can also be double-checked on the person’s consumer credit report.

The individual may also be able to access his or her payment history via records through bank records.

Can the Statute of Limitations be Reset?

Occasions do exist where the statute of limitations clock can be reset. One of these occasions occurs when the debtor makes a payment on the account to the debt collection agency. This payment then brings the account to a “current” status and officially resets the statute of limitations time-frame.

Many debt collectors are banking on this fact when they contact a debtor for an old debt. Once the debtor makes a payment and then fails to keep up with the payments, the debt collection agency suddenly regains the legal right to file a suit against the debtor for the remaining balance due on the account. Therefore, it is important to be aware of this fact when speaking with a debt collector and to always verify the information given to the debtor by the debt collector.

Whether the debtor chooses to make a payment ultimately is up to him or her. Many individuals choose to repay the old debt as a matter of principal, or many will work with the debt collector to reducing the total amount owed. However, it is important that the debtor be aware of the consequences of paying on the account.

What Should You do if a Debt Collector Tries to Collect Past the Statute of Limitations?

If a debt collector has contacted a person regarding an old debt that is past the statute of limitations, it is recommended that a bankruptcy attorney be contacted for advice.

If the collector has already filed a legal claim against the debtor on the time-barred debt, it is never recommended that the individual named in the claim ignore the filing. Never assume the court will see that the debt is past the statute. By ignoring the claim and choosing to not answer the filing, the debtor is opening himself or herself up to the possibility of a default judgment against him or her, including a garnishment of the debtor’s wages.

The courts give a limited period of time for individuals to file a legal response to a claim, and the defense of the debt being barred by the statute of limitations needs to be stated as an affirmative response to the original complaint. An attorney can assist in preparing this defense and in making sure that the debtor’s rights are fully protected.


An experienced Texas bankruptcy lawyer can help you if you are contacted regarding an old debt and can help address any concerns you have about how the bankruptcy process also may help. Call the Law Office of Marilyn D. Garner at (817) 505-1499 NOW for a free consultation to discuss how bankruptcy may help you.

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