Introduction
Debts have a time period during which they can be legally enforced, and during this period, creditors can use the courts to force you to repay the debt. This time frame is known as the statute of limitations. The statute of limitations can vary depending on the type of debt you have: open account, oral agreement, promissory note, or written contract. It is important to know the type of debt you are dealing with so that you can use the correct timeframe to consider whether the debt has exceeded the statute of limitations.
What is a Written Contract?
A written contract is an agreement that is documented on a printed document signed by the creditor and the debtor. Written contracts are legally binding and easier to enforce than oral contracts.
In a written contract, one party agrees to provide a service or supply a product, and the other party agrees to the specified payment terms. The terms of written contracts can vary from contract to contract.
How Do Debts Become Bad Debts?
Once the written contract is signed, you are bound by the terms of the contract. If you fail to comply with the terms of the contract by not repaying the amounts agreed upon, the other party may take certain actions to pursue you for repayment of the owed amount. One of these actions could be filing a lawsuit against you to force repayment.
If the court determines that you owe the debt, a judgment may be issued requiring you to repay the debt. After a judgment is made against you, the other party may sue to garnish your wages if you have not repaid the debt afterward.
The court can only compel you to repay what you owe under a written contract as long as the statute of limitations has not expired on the debt. The countdown begins on the last late activity on your account. The date of the last activity can be the last date you made a payment or made arrangements related to the payment, or even acknowledged the debt. It is important to keep records regarding your debts so that you can properly track the statute of limitations.
Statute of Limitations
The statute of limitations for written contracts varies from state to state. Often, the number of years for the statute of limitations exceeds that for open accounts, which include credit cards and lines of credit. Use the table below to find out the statute of limitations for written contracts in your state. If you face a lawsuit from someone with whom you have a contract, consult an attorney to check the timeline for the statute of limitations and discuss how to use it as a defense against the lawsuit.
Statute of Limitations by State
Alabama: 6 years
Montana: 8 years
Alaska: 3 years
Nebraska: 5 years
Arizona: 6 years
Nevada: 6 years
Arkansas: 5 years
New Hampshire: 3 years
California: 4 years
New Jersey: 6 years
Colorado: 6 years
New Mexico: 6 years
Connecticut: 6 years
New York: 6 years
Delaware: 3 years
North Carolina: 3 years
Florida: 5 years
North Dakota: 6 years
Georgia: 6 years
Ohio: 8 years
Hawaii: 6 years
Oklahoma: 5 years
Idaho: 5 years
Oregon: 6 years
Illinois: 10 years
Pennsylvania: 4 years
Indiana: 10 years
Rhode Island: 10 years
Iowa: 10 years
South Carolina: 3 years
Kansas: 5 years
South Dakota: 6 years
Kentucky: 10 years
Tennessee: 6 years
Louisiana: 10 years
Texas: 4 years
Maine: 6 years
Utah: 6 years
Maryland: 3 years
Vermont: 6 years
Massachusetts: 6 years
Virginia: 5 years
Michigan: 6 years
Washington: 6 years
Minnesota: 6 years
West Virginia: 10 years
Mississippi: 6 years
Wisconsin: 6 years
Missouri: 10 years
Wyoming: 10 years
Continuity of the Statute of Limitations
The statute of limitations will continue as long as no action has been taken regarding the debt. Be careful not to take any action that could restart the statute of limitations. This will give the creditor more time to sue you and win a judgment against you.
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Sources
The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts in our articles. Read our editorial process to learn more about how we verify facts and maintain the accuracy, reliability, and quality of our content.
U.S. Department of Labor. “Garnishment.”
Federal Trade Commission. “Time-Barred Debt.”
More
Statute of Limitations for Debt Collection by State
What is a Zombie Debt?
What is an Open Account?
What is Eviction?
Statutes of Limitations for Tax Review and Collection
What is a Legal Contract?
What to Know About the Statute of Limitations on Debt
What is a Garnishment Order?
How to Write a Verification Letter
What is Debt Reinstatement?
When Does the Statute of Limitations Start?
What Can Restart the Statute of Limitations on Debt?
What is a Hammer Clause?
What to Do When a Debt Collector Calls You?
What Are Collectible Debts?
What Happens When a Court Issues a Judgment Against You?
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Source: https://www.thebalancemoney.com/written-contract-961146
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