When you’re in debt, it can often seem like the cycle is never ending. Between interest and everyday expenses, you can have a problem paying off your debt. And if you ever reach the point where you have no choice but to stop paying these bills, you may be afraid of the consequences. Under certain situations, a statute of limitations could be your best defense against your creditors. Each state has different laws. These particular ones will help if you live in California.
| Oral Contract | 2 years |
| Written Contract | 4 years |
| Promissory Note | 4 years |
| Open Accounts | 4 years |
The clock starts when you default on a debt. Four years after that (or two, for oral contracts), the statute of limitations will have expired. This does not mean that they cannot file a lawsuit against you. This does not mean that, if you are summoned to court for this purpose, you can refuse to go. It simply means that, once you are in court, this should be the defense your lawyer turns to and the judge may dismiss the case because of it. The length of time for the statute of limitations can be lengthened, but only while the contract has not been breached.
The length can be shortened as well, under certain circumstances. An attorney should be able to help you determine if stopping the clock on the statute of limitations (or tolling) can be applied.
Some important things to remember is that you should always keep your paperwork whenever you borrow money or otherwise use credit. This will be helpful to look back on in case you are brought to court over your debt. The important date will not be the charge-off date, but the date you actually stopped paying on your debt, as this is when the statutes of limitations clock actually begins. If the four years (or two) have already run out and you are contacted regarding the debt, do not agree to pay it. In fact, do not even admit that you owe it. Tell them the statute of limitations has run out and ask them not to contact you again.
In California, when the statute of limitations on debt runs out, this does not mean that they cannot file the lawsuit. The debt will still appear on your credit report and they can still try to collect the debt. However, if they try to sue you for it, you will have a built in defense that should help in having the case dropped.
Kari discovered the magic of writing early, in elementary school, and has devoted every spare moment to it since. She writes fiction for her own amusement, and recently began writing articles for The Daily Tar Heel in Chapel Hill. Besides writing, she loves spending time with friends and family, reading, and drinking coffee. She defines herself based on her faith in God, her family roots, and her dream of one day publishing a best-selling novel.
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