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Which Statute of Limitations on a Debt is Applicable if I’ve Moved?

October 30th, 2008 · 27 Comments · Consumer Debt, Credit Counselor Front Lines, Legal Stuff

by Kristy Welsh

(Last Updated On: April 6, 2011)

Just received this question from a reader:

Q. I had a collection that originated in 2004 in Maryland. The statute of limitations (SOL) was 3 years; 2007 came and went with no suit from the collection agency.

Now I live in a state where the SOL on a written contract is 6 years. If they can bring suit here, they’re covered clean up to 2010. Can they sue me in the state I currently live in when the contract was formed in MD and is past that 3 year SOL?

A. The statute of limitations on a debt is the time period in which a creditor has to sue a debtor after the debt goies into default. For example: if a consumer defaults on a debt in 2003 and the state’s statute of limitations is 4 years, the statute of limitations runs out in 2007. if the creditor sues the debtor in 2008, the suit can be thrown out due to the fact that the statute of limitations has expired.

Like the person posing the question above: many people who have moved out of state find themselves the object of a lawsuit in a new state and are confused about which state’s SOL should be used. Here are some guidelines:

  1. Technically speaking, the statute of limitations for a debt are tied to the state where the debt was created.
  2. If a creditor sues you, in general, the SOL of the state in which the suit is filed are the enforceable ones. This often works to the advantage of a consumer who moves to a state with a shorter SOL than the one where the debt was created.
  3. Some states have a “borrowing statute” law on the books that allows you to use the shorter SOL from a previous state.
  4. If you left the state where the debt was created BEFORE the SOL ran out, the SOL cannot be revived – not even with a ‘borrowing’ statute.
  5. Florida, Kentucky, Missouri, Pennsylvania, Oklahoma and Wisconsin do not apply any residency requirements to determine whether to borrow another state’s statute of limitation. In cases filed in these jurisdictions, even if the plaintiff and defendant are residents of the state in which the suit is filed, courts will apply the limitation period of the state in which the borrower lived during the creation of the debt to determine whether suit is timely filed.

In this case, the reader cannot be sued, even in a state where a longer SOL applies, due to the fact that the statute of limiations ran out before he moved out of state.

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27 Comments so far ↓

  • John Eumas

    So, basically, and correct me if I’m wrong…

    I opened a credit card account in Illinois (4 yr SOL) in 2000, with last payment in June, 2004…4 years 7 months ago.

    I moved to Missouri in early 2005 (5 yr SOL)

    Because of Missouri’s borrowing statute, the Illinois timeline is the one that would be used in a potential case?

  • John K.

    Same question… I had a car repoed in North Carolina in 2005. (SOL 3 years) I moved to Missouri a couple of months later. Are you saying that the NC SOL would apply even though I now live in Missouri?

  • JONNI

    ALSO, HOW CAN I FIND OUT WHEN THE ACCOUNT WAS CHARGED OFF? WHEN I WAS ORIGINALLY SERVED, LAST YEAR, UNTIL NOW, WHEN THE COURT DATE IS SET, THE AMOUNT WENT UP FROM $8650 TO $11724.

  • Kristy

    First thing is to not type in ALL CAPS.

  • Doris

    We bought a car that was reposessed in 1998. We haven’t heard from them since. We got a letter from the IRS last week stating that a 1099-C was filed and we now owe the IRS $1221.00 if we pay soon. Is this legal for the creditor to file this claim since the debt is more than ten years old?

  • Kristy

    I am not sure of the IRS regulations on this. (Sometimes, neither are they.) Does anyone else know?

  • Jason

    I have credit card that the last payment was on October 5, 2005. The state where I live has a SOL of 4 years, but I am moving to a state with a SOL of 6 years in about three weeks. I cannot push back the move. Am I screwed? Oh, the collection agency in question just sends me monthly letters offering me reduced settlements…I haven’t ever spoken with them.

  • Jason

    Oh, I should have said that I live in Texas, and am moving to Oregon.

  • Kristy

    See if Oregon has a “borrowing statute”, which means the court will use the SOL where the debt originated.

  • Jason

    I thought since Oregon had reverse borrowing, then they wouldn’t have a borrowing statute.

  • Jason

    I found this…sounds like a borrowing statute

    12.430 Claims based on law of other states; limitation period. (1) Except as provided by ORS 12.450, if a claim is substantively based:

    (a) Upon the law of one other state, the limitation period of that state applies; or

    (b) Upon the law of more than one state, the limitation period of one of those states, chosen by the law of conflict of laws of this state, applies.

    (2) The limitation period of this state applies to all other claims. [1987 c.536 §2]

  • Kristy

    Yeah, it does sound like a borrowing statute. But I would like to see some case law to back it up.

  • Jason

    Where might I find that? Oh, and the here is the reverse borrower statute…

    12.450 When limitation period of another state not applicable.
    If the court determines that the limitation period of another state applicable under ORS 12.430 and 12.440 is substantially different from the limitation period of this state and has not afforded a fair opportunity to sue upon, or imposes an unfair burden in defending against the claim, the limitation period of this state applies. [1987 c.536 §4]

    Wonder what “substantially different” is? The one case that I saw was something unending.

  • Jennifer D.

    I have a debt from an apartment in Fl from 2004, that is showing on my report. I was never notified of the debt, and I have no idea what the $2702 could before.
    The SoL in Fl for a written contract is 5 yrs, so it is expired, but I moved to Oh in 2006, I know they cannot sue me, but what obligations do I have to them, and how do I get them to take it off my credit report?

  • Kristy

    If Ohio doesn’t have a borrowing statute, and the credit card contract doesn’t say it must go by the rules of Delaware of Virgina (or another state), then the SOL is the Ohio SOL.

  • Christopher

    I’m having a reverse situation. I purchased a car in 2000 in WI, SOL 10yrs. A year later I moved to MD, SOL 6yrs. The vehicle was repossessed in 2002 and a judgment was placed against me in 2003 I believe. I’ve heard nothing from Ford Motor credit since the vehicle was auctioned off. I know the vehicle was sold for 500.00 (which i believe to be below fair market value) and the blue book value was over 2000.00. I just recently went to court in September 2010 and my judgement was domesticated to VA, where I have resided since August 2005. Since my contract was signed in WI, but resided in MD afterward, where the vehicle was repossessed an resold….wouldnt my SOL now be for MD? Im going to court again in December and Im trying to get everything in order. Someone, help…please.

  • Rico

    I had an eviction in MD back in June 07 and went to collections in Aug 07 and I made payments until about Jan 08 but never paid it off. So now it has been 4yrs the SOL in MD is 3yrs. Does this mean they can’t suit me for payment

  • Linda

    I have a credit card debt from PA. Last payment made Nov 2008. Moved to OH 4/11 but still owned house in PA till Nov. 2012. Loan was sold to collection lawyer, now I am getting collection calls. Which state SOL applies?

  • Kristy Welsh

    It actually depends on the credit card, as well. Some of the agreements allow the company’s HQ state’s SOL to rule. Capital One is one of these, and that is Delaware. If you are sued, it will have to be in Ohio. See if Ohio has a borrowing statute allowing this. You might also successfully be able to argue that the SOL is Pennsylvania. Check your rules of civil procedure.

  • Jon

    Kristy,
    Today I received a phone call stating that I had a bounced checks from a collection company representing Check N Go back when I was a student. I had actually paid that bill off, but unfortunately it was with a bank certified check. I am currently ordering my old bank statements to see if that amount shows. This all took place in the summer of 2008. I have received no notification from the lender or the collector until five years later with a threat of summons for a felony charge for check fraud and he hung up on me. I check my credit bureau report 1-2 a year, which states nothing of this. I also contacted the police department to see if there were criminal charges filed during that period of time and there was still nothing in the system. I use to live in Michigan were the SOL is 6 years and now where I have lived for the past 4 years the SOL is 3 years. Can you please explain how the SOL would work towards or against me. This really irritates me because I am debit free and the showed no means to contact me. How I found out was through my dad that lives in MI.

    Thank you

  • Reed

    Hello,

    I know this thread is a few years old so I’m hoping you still see this post.

    Long story short, I took out a private student loan in the spring of 2006. In 2008 I recall this debt going to collection and I made an agreement with them that I would pay a certain percentage of it and the balance would be forgiven. I made the agreed to payment in 2008 and never heard from this again until spring 2016 when another collection agency reached out to collect the remaining balance (<$500).

    I know I paid this off and don't owe this balance, however as a young college student in 2008 I didn't retain the payment info or the agreement. I asked the collection agency for verification and they recently sent me a promissory note but nothing on the account history. When I tried calling the original creditor they didn't have any record of me in their system.

    When I took the loan in 2006 I was living in the State of Wisconsin (from what I can see, SOL is 6 years for written contracts, 10 years for promissory notes). I have since moved to the District of Columbia (from what I can see, SOL is 3 years on all types of debts).

    I wanted to ask a couple things 1) What should my next steps be? And 2) Do you believe I could still be sued over this or have it put on my credit report given it's over 10 years old (and the most recent payment/transaction likely being about 8 years ago).

    Thank you for your help.

  • Kathy Richards

    First off – do not contact the debt collector anymore. Instead, pull all of your credit reports and see if that collection is listed on there. If not, don’t worry about. If so, send a dispute letter to the CRA challenging this entry and advise them you paid this debt off in 2008. IMHO – I don’t think you will be sued for this debt as it looks to be clearly past the SOL.

  • Tina Mackie

    Hi there,

    I had a house in Texas that was foreclosed on back in 2008. This was part of the subprime lending situation. I had a second mortgage on that house. I never heard anything about having to pay the second mortgage until recently. However, I live in New Jersey now. I don’t have any money to pay this. My foreclosure on my home loan was on my credit and now it has fallen off. How can I still owe on a second mortgage if i foreclosed? And since I live in New Jersey but theloan originated in Texas, whose collection laws apply? In Texas there is no wage garnishment but in NJ there is. I do not want to be garnished. I do not want to file bankruptcy. What do I do?

  • Sean

    Hi I too see this is sorta old but hoping someone who actually knows their stuff can tell me the answer. I got a payday loan in which my last payment was in August of 2006 and now I got a guy calling me threatening to sue the loan was in Washington state but I was military and legal resident of Arkansas I got injured and was given medical discharge so moved back to Arkansas in October of 2006 2 months after my last payment but was always resident of Arkansas the Sol has ran out on both states but someone told me since I left Washington before 4 years which is their Sol that the clock never technically started on the Sol is that true or is this just another scare tactic should I tell the guy go ahead sue me or should I try to comply?

  • Chris

    I have a debt collector coming after me. I collected it in NY with a SOL of 6 years I moved to Ohio and it has been a total of almost 8 years in July can they still come after me since it’s been that long

  • Chris

    Forgot to to add Ohio has a borrowing statute

  • George Maso

    I incurred a debt for a ring at Jared’s in Minnesota in 2009. I was and still am residing in Wisconsin when I incurred the debt.
    Recently I was contacted by an attorney from California stating his client bought my debt and that the statute of limitations for Minnesota don’t apply since Jared’s Headquarters is located in Kentucky.
    Can the debt buyer use another State’s SOL when they sue me?

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