Have you ever been constantly hassled by debt collectors about a debt that you thought was written off years ago? However, at some point, the cycle has to stop. You do not have to pay a debt that is considered too old by your state. This is known as the statute of limitations on debt. This is the period of time that a collector has to use the court to force you to pay off a debt.
| Oral Contract | 6 years |
| Written Contract | 6 years |
| Promissory Note | 6 years |
| Open Accounts | 6 years |
There are four different kinds of agreements that have a statute of limitations – oral contract, written contract, promissory note, and open-ended account. An oral contract is when one party agrees to pay money loaned to them by the other party, but nothing is written. Everything is verbal, which makes it tougher to prove in court.
A written contract is very similar to an oral contract, but the terms and conditions of this agreement are all explained in the document. This is easier than an oral contract to prove in court. Next, there is a promissory note. This is like a written contract, but the repayment plan, with interest rate and date and time are all included in the agreement. An example of this would be a mortgage.
Lastly, an open-ended account is an account with a revolving balance that you can repay and borrow. The best example of this would be credit card accounts. The statute of limitations on debt in Hawaii for all four types of agreements is 6 years.
Some debt collectors will keep hassling you about a debt, hoping you don’t know about the statute of limitations. This is why it’s so important to do your research and stay up to date about this information.
Just be careful not to restart the statute of limitations. For example, when you make a payment or enter a payment agreement, the limitations restarts on that account. It doesn’t matter how much time has already elapsed on that account. However, keep in mind that some debts don’t have a statute of limitations. This includes income taxes, federal student loans, and child support in some states.
Every summer, Archana works at Kumon, a math and reading workshop, tutoring children between the ages of three and 18 in these subjects. She used to be enrolled in this program herself, so this allows her to connect with the students and give them the one-on-one help that they need. Archana is also currently a member of NC State’s Psychology Club, Rotaract Club, and EKTAA (NC State’s premiere South Asian Student Organization).
Archana was born in India, and moved to North Carolina with her immediate family when she was 7 years old. She speaks mostly Tamil, the native language of South India, and English in her home. In addition, having taken Spanish classes since 6th grade, she can speak and understand it pretty well too. Archana enjoys spending time with her family and friends, watching movies, listening to music, and going to the gym. She also loves to travel, and hopes to travel the world one day and learn about all the different cultures!
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