California’s statute of limitations on debt is 4 years, per the state’s Code of Civil Procedure § 337. A statute of limitations is the amount of time you have to take legal action. In the case of debt, it refers to how long a creditor has before it can ask a court to force you to pay debt. If you can prove a debt has passed its statute of limitations, you are not responsible for paying it.
When Does the Clock Start Ticking?
For credit card debt, it begins on the date of the last payment or last charge you made on an account. Creditors, collectors, or debt buyers often file a breach of contract claim, as when you take on debt, you’re making a contract to pay it in exchange for credit to purchase a product or service. The contract will be considered breached when you stop paying off the debt.
A breach of contract usually occurs when the account is charged off, which occurs when the account is 180 days delinquent. This is important to know when being sued. You can determine the date of the last payment, and count 180 days ahead, to see if the statute of limitations can be used as a defense.
Does Anything Stop the Clock from Running?
There are many events that can stop, or “toll”, the statute of limitations clock. Under California state law, some of the reasons this can happen include:
- You are out of the state for a period of time
- The time you are in bankruptcy and debt is not discharged
- A voluntary agreement signed by both parties
- Equitable tolling circ*mstances, such as fraud, interference, or unforeseen circ*mstances
Reviving the statute of limitations on collecting debt in California generally requires a written agreement. But there are other ways you can acknowledge you owe debt or intend to pay it. There are a few categories depending on the debt you have; the time limits differ for each type, including:
- Written contracts signed by you and the creditor, with the amount owed, monthly payments, and terms and conditions.
- Oral agreements to pay back money; there does not have to be a written contract.
- Promissory notes, or written agreements to pay back debt in increments, at a specified interest rate, by a given deadline.
- Open-ended accounts like credit cards with revolving balances that you repay and borrow from again.
Does Only California Statute of Limitations Apply?
You may be subject to terms that reflect other state laws. For example, Chase, Discover, and Bank of America credit cards typically follow the laws of Delaware, while Capital One refers to Virginia law. This is significant because Delaware has a 4-year statute of limitations for open-ended accounts and, in Virginia, it is 3 years.
In California, while written, promissory, and open agreements have a 4-year deadline, for oral agreements it is 2 years.
How Do I Know Which Statute of Limitations Applies?
Raising a statute of limitations defense requires being attentive and assertive. A range of issues can determine whether the applicable statute of limitations has expired. One issue is to decide if California’s 4-year statute applies to your case. It’s therefore wise to meet with an attorney familiar with the law and debt collection in general.
Contact Oak Tree Law
If you have issues with debt or debt collectors, our legal experts can provide representation and find the best legal solutions for your situation. Applying a statute of limitations to a debt-related case can be challenging. Whether you have high amounts of outstanding debt, have faced harassment from debt collectors, or are considering filing for bankruptcy, contact us for a free evaluation or call 888-348-2609.
FAQs
California's statute of limitations on debt is 4 years, per the state's Code of Civil Procedure § 337. A statute of limitations is the amount of time you have to take legal action. In the case of debt, it refers to how long a creditor has before it can ask a court to force you to pay debt.
How long before a debt becomes uncollectible in California? ›
In California, most credit card companies and their debt collectors have only four years to do so. Once that period elapses, the credit card company or collector loses its right to file a lawsuit against you.
What is the statute of limitations on debt collectors in California? ›
Debt collectors may not be able to sue you to collect on old (time-barred) debts, but they may still try to collect on those debts. In California, there is generally a four-year limit for filing a lawsuit to collect a debt based on a written agreement.
What is the statute of limitations for loan debt in California? ›
The statute of limitations on debt in California is four years, as stated in the state's Code of Civil Procedure § 337, with the clock starting to tick as soon as you miss a payment.
What is the new law for debt collection in California? ›
California Coerced Debt: California SB 975, for debts incurred after July 1, 2023, requires a collector to cease collection until it completes a review when the debtor provides documentation and a sworn statement that the debt was coerced. A person who coerces a debt is civilly liable.
Should I pay a debt that is 7 years old? ›
Although the debt won't be factored into your credit score after seven years, there are still consequences. When you stop paying your debt, the creditor will start charging late fees and interest will continue to accumulate, increasing the balance you owe.
What is the 11 word phrase to stop debt collectors? ›
If you are struggling with debt and debt collectors, Farmer & Morris Law, PLLC can help. As soon as you use the 11-word phrase “please cease and desist all calls and contact with me immediately” to stop the harassment, call us for a free consultation about what you can do to resolve your debt problems for good.
What can restart the debt statute of limitations in California? ›
Agreeing to pay: If you acknowledge that the debt is yours and agree to pay, the statute of limitations on your debt will start over. Making a charge: If you have an old credit card or revolving debt and you make a charge to your account, the clock on your old debt will restart.
Can a debt collector restart the clock on my old debt? ›
Acknowledging Ownership of the Debt in Writing: Any written communication that confirms your ownership of the debt can trigger a restart of the limitations period. This could include a letter to the debt collector, a text message discussing the debt, or even an email acknowledging the outstanding balance.
Does disputing a debt restart the statute of limitations? ›
Yes, disputing your debt can restart the statute of limitations.
The California statute is called the Rosenthal Fair Debt Collection Practices Act. Creditors and debt collection agencies are permitted to take reasonable steps to enforce and collect payment of debts. That is because an efficient and productive economy requires a credit process.
When can a debt no longer be collected? ›
Can I be chased for debt after 10 years in USA? ›
As you may have guessed by now, the short answer is: it depends. Here are some scenarios: Time-barred debt: If the statute of limitations has expired (which in many states would be the case after 10 years), the creditor cannot legally sue you for the debt. However, they may still attempt to collect through other means.
How long can a debt collector legally pursue old debt in California? ›
In California, in fact, the statute of limitations on most debt is four years. That means that a creditor or debt collector cannot attempt to collect on an account that was last active four or more years ago. In most cases, the clock starts with the last payment made on the account.
Can you dispute a debt if it was sold to a collection agency? ›
Can you dispute a debt if it was sold to a collection agency? Your rights are the same as if you were dealing with the original creditor. If you do not believe you should pay the debt, for example, if a debt is stature barred or prescribed, then you can dispute the debt.
Can a collection agency put old debt as new? ›
Collection agencies cannot report old debt as new. If a debt is sold or put into collections, that is legally considered a continuation of the original date. It may show up multiple times on your credit report with different open dates, but they must all retain the same delinquency date.
What happens after 10 years of not paying debt? ›
Each state has its own statute of limitations on debt, and after the statute of limitations has expired, a debt collector can no longer sue you in court for repayment. However, in many places, debt collectors can still try to collect on old debts beyond the expiration of the statute of limitations.
What happens to unpaid credit card debt after 7 years in California? ›
Under the Fair Credit Reporting Act (FCRA), most negative information, including unpaid credit card debt, must be removed from your credit report after seven years.
How long does a debt Judgement last in California? ›
If your judgment has already expired, you should consult an attorney before taking any action. California judgments last for 10 years from the date they were entered. If you win a judgment issued by a federal court, you may start collecting right away.
