Does Debt Expire? Statutes of Limitations by State

Debt does not expire in the sense of disappearing from your balance sheet, but a creditor’s right to sue you over it does. Every state sets a statute of limitations on debt collection lawsuits, and once that window closes the debt is called “time-barred.” The unpaid balance still exists and collectors can still call and write, but they lose the power to take you to court. Three things complicate that basic rule: certain actions on your part can restart the clock, some categories of debt never become time-barred, and debt that is forgiven can turn into a tax bill.

What “Time-Barred” Means in Practice

Once the statute of limitations passes, a collector loses the legal right to file a lawsuit or obtain a court judgment against you. Without a judgment, a collector cannot garnish your wages, freeze your bank account, or place a lien on your home. The debt still exists as an unpaid balance, and collectors can still contact you by phone or mail asking for payment, but the threat of a courtroom is off the table.¹

Filing suit on a time-barred debt actually violates federal law. The Fair Debt Collection Practices Act prohibits debt collectors from suing or threatening to sue on debts past the statute of limitations.² But there is a serious catch. If a collector files anyway and you do not show up to raise the expired statute of limitations as a defense, a court can still enter a judgment against you. The expired clock is a defense you have to assert yourself.¹ Ignoring a lawsuit summons on an old debt is one of the worst things you can do.

How Long the Clock Runs

The statute of limitations depends on how the debt was created, and every state sets its own numbers. The ranges below cover the national spread.

Oral agreements. Verbal promises to repay with no signed document carry the shortest windows, typically two to six years.³
Written contracts. Signed agreements with defined terms run longer, generally three to ten years.³
Promissory notes. Formal loan instruments used for mortgages and private loans usually give creditors six to ten years.³
Open-ended accounts. Revolving credit like credit cards, with no fixed payoff date, generally runs three to six years.³
Medical debt. Most states treat medical bills as written contracts, placing them in the three-to-ten-year range. A handful of states have started to create shorter, dedicated timelines for medical debt.

Which State’s Rules Apply

If you have moved since taking on a debt, the governing law is not always your current state. It can depend on the type of debt, where you now live, and the state named in the credit agreement.¹ Many credit card contracts include a choice-of-law clause naming the issuing bank’s home state, and that clause can pull in a longer limitations period than the state you actually live in. When a collector contacts you about something old, identifying which state’s clock controls is one of the first things worth pinning down.

What Restarts the Clock

This is where most people get into trouble. The limitations clock can be reset, and collectors know how to make that happen.

In many states, making even a small partial payment on an old debt restarts the entire limitations period from day one. The size of the payment does not matter; any payment can count as an acknowledgment that revives the debt.

Written acknowledgment does the same thing. Signing a letter, replying to an email confirming the balance, or agreeing to a new payment plan can hand the creditor a fresh window to sue. In most states even a verbal acknowledgment over the phone can restart the clock, though a few states require the acknowledgment to be in writing before it has legal effect. A settlement agreement creates a new contractual obligation with its own timeline.

Collectors sometimes engineer these interactions on purpose. A call asking you to “just confirm the balance” or to “make a small good-faith payment” may be designed to restart the statute of limitations. If you are dealing with very old debt, the safest move is to avoid saying or doing anything that acknowledges the balance until you have confirmed whether the debt is time-barred and understand what a restart would mean in your state.

There is also a secondary market to be aware of. Debt buyers purchase expired or nearly expired accounts for a fraction of face value and profit when a small share of consumers agree to pay something. Federal law still prohibits them from suing on time-barred debt, but they can send letters and make calls asking for voluntary payment.⁴ The risk is the same: any payment can hand them the right to sue again.

Debts That Never Expire

Some categories of debt sit outside the standard rules and can be collected indefinitely.

Federal Student Loans

Federal student loans have no statute of limitations. The government can pursue collection for the rest of your life, using tools private creditors do not have: garnishing wages without a court order, intercepting federal tax refunds, and offsetting Social Security benefits. Private student loans are different. They are subject to your state’s statute of limitations like any other written contract, typically three to ten years.

Federal Tax Debt

The IRS generally has ten years from the date a tax liability is assessed to collect what you owe. After that, the collection statute expiration date passes and the IRS loses its right to pursue the balance.⁵ But the clock pauses or extends in several situations. Bankruptcy suspends it, entering an installment agreement can extend it, a collection due process appeal pauses it, and living outside the country for six or more continuous months suspends it.⁶ Someone who has been through several administrative fights with the IRS may find the real collection window stretches well beyond ten years.

Child Support Arrears

No federal law places a statute of limitations on child support enforcement, and most states allow collection of unpaid child support indefinitely, even after the child reaches adulthood. The enforcement tools are aggressive: wage garnishment, tax refund interception, passport denial, and driver’s license suspension.

Court-Ordered Fines and Restitution

Criminal restitution and court-ordered fines generally remain enforceable for as long as the court keeps the case open, which can be the debtor’s lifetime. The statute of limitations that would bar a comparable civil lawsuit does not bar restitution in a criminal case, and nonpayment can trigger consequences tied to the underlying case, including probation violations.

Credit Reports Run on a Different Clock

The lawsuit deadline and the credit-report timeline are two separate things and do not control each other. Under federal law, most delinquent accounts must be removed from your credit report after seven years, and that period starts running 180 days after you first became delinquent and never caught up.⁷

The two timelines often do not line up. A debt can drop off your credit report while the creditor still has the legal right to sue, or the statute of limitations can expire years before the account disappears from your report. Paying off an old debt to head off a lawsuit will not automatically clear it from your credit file, and a debt falling off your report does not eliminate the underlying legal obligation.

Forgiven Debt Can Become Taxable Income

One consequence catches people completely off guard. When a creditor cancels or forgives a debt of $600 or more, they are generally required to report the canceled amount to the IRS on Form 1099-C.⁸ The IRS treats the forgiven amount as ordinary income, which means you may owe tax on debt you never actually repaid.⁹ This happens when debt is settled for less than the full balance, formally forgiven, or written off. Negotiate a $15,000 credit card balance down to $6,000 and the remaining $9,000 can show up as income on your next return.

Federal law provides several exclusions that can reduce or eliminate this tax hit:

Insolvency. If your total liabilities exceeded the fair market value of your total assets immediately before the cancellation, you can exclude the canceled amount up to the extent you were insolvent. You report this on Form 982.¹⁰
Bankruptcy. Debt discharged in a Title 11 bankruptcy case is fully excluded from income.¹⁰
Qualified principal residence debt. Forgiven mortgage debt on your primary home may be excluded if the discharge occurred before January 1, 2026, or was subject to a written arrangement entered into before that date.¹¹

The insolvency exclusion is the one most relevant to people dealing with old, overwhelming debt. Calculating it means adding up everything you own, including retirement accounts and otherwise exempt assets, and everything you owe. If your debts exceeded your assets at the moment of cancellation, you were insolvent, and the canceled debt is excluded up to the amount of that insolvency. Many people struggling with debt they cannot repay qualify without realizing it.

1
Consumer Financial Protection Bureau. Can Debt Collectors Collect a Debt That’s Several Years Old?
2
Office of the Law Revision Counsel. 15 U.S. Code 1692e – False or Misleading Representations
3
Justia. Civil Statutes of Limitations: 50-State Survey
4
Consumer Financial Protection Bureau. CFPB Issues Guidance to Protect Homeowners from Illegal Collection Tactics on Zombie Mortgages
5
Office of the Law Revision Counsel. 26 U.S. Code 6502 – Collection After Assessment
6
Internal Revenue Service. 5.1.19 Collection Statute Expiration
7
Office of the Law Revision Counsel. 15 U.S.C. 1681c – Requirements Relating to Information Contained in Consumer Reports
8
Internal Revenue Service. About Form 1099-C, Cancellation of Debt
9
Internal Revenue Service. Topic No. 431, Canceled Debt – Is It Taxable or Not?
10
Internal Revenue Service. Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments
11
Office of the Law Revision Counsel. 26 U.S. Code 108 – Income from Discharge of Indebtedness