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Philadelphia Bankruptcy Attorney Dan Mueller of Harborstone Law Group represents consumers in bankruptcy and debt negotiation matters throughout Philadelphia, Montgomery County, Delaware County, and Bucks County in Pennsylvania.

The Pennsylvania Statute of Limitations on Debt Stops Vulture Debt Collectors

Pennsylvania Statute of Limitations on DebtThe four-year Pennsylvania Statute of Limitations on debt is an often overlooked but powerful defense for consumers facing aggressive creditors. Debt collectors do not want you to know this, but sometimes a debt is just too old to collect. All states have “Statutes of Limitation” that prevent a creditor from enforcing a debt, if the creditor does not file suit within a certain period of time. In other words, if a creditor waits too long to sue you, it is simply out of luck. Unfortunately, there are “vulture” debt collectors who will continue to try to collect on debts after the Statute has run out. Therefore, before resorting to bankruptcy or beginning debt negotiations, it is important to know what the Statute of Limitations is and how it can protect you.

The Pennsylvania Statute of Limitations on debt

The Pennsylvania Statute of Limitations on written contracts, oral contracts, promissory notes, and open-end accounts (e.g., credit cards) is 4 years.  (42 Pa. C.S. 5525(a)) The creditor has 4 years to file suit from the date of the last activity on the account, which almost always means the last time the debtor made a payment. If the creditor has not filed suit within 4 years of that last payment, the debt is unenforceable. (If the debtor made no payments at all on the account, the Statute runs from the date that the first payment was due.)

Example:  Ann owes $2000 on her ABC credit card. She last made a payment on the card on June 10, 2010. If Ann makes no more payments, ABC has until June 9, 2014 (4 years from the last payment) to file suit against Ann. If ABC fails to sue Ann by June 9, 2014, the creditor’s claim is barred by the Statute of Limitations.

Stopping and Starting (Tolling)

Certain events, such as moving out of state or deliberate concealment, may “toll” or suspend the Statute of Limitations, meaning that it stops running during the event and starts running again when the event is over. Bankruptcy also tolls the Statute. Therefore, if you file for bankruptcy under any chapter, but the case is dismissed, the statute is tolled during the time that the bankruptcy was pending. Thus, you must take into account any tolling period when calculating when the statute runs out.

Example: If Ann from the example above moves out of state on January 15, 2011 and returns on January 14, 2012, the Statute would be tolled during the year that she was out of state. Therefore, it would run out on June 9, 2015 rather than June 9, 2014, giving the creditor another year in which it can file suit.

Quick Note: The Statute of Limitations is an “affirmative defense”, meaning that if the creditor sues you, you must raise this defense in your answer to the lawsuit. If you do not respond to the lawsuit and raise your Statute of Limitations defense in your answer, you could end up with a judgment against you, even though the debt is beyond the Statute. In other words, you lose your Statute of Limitations defense by failing to raise it.

Hovering vultures

You might wonder why a creditor would try to collect on a debt after the Statute of Limitations has run out.  However, it can be a lucrative business, particularly if you lack scruples. “Vulture” debt collectors purchase very old accounts on which the Statue of Limitations has run out for a few cents on the dollar. They count on debtors not understanding that these debts are unenforceable. I see this situation more and more in my Philadelphia bankruptcy and debt settlement practice. Many of these debt collectors use extremely aggressive tactics.

When the Statute of Limitations does not apply:

The Statute of Limitations on debt does not apply to judgments. Once a creditor has obtained a judgment against you, there is no Statute of Limitations defense. Judgments are essentially forever in Pennsylvania and act as a lien on real property. However, there is a limitation, albeit not a very useful one. The judgment creditor has twenty years to execute against the debtor’s personal property (e.g., money in bank accounts, furnishings, vehicles, etc.) to collect the judgment. In some circumstances, for example if you were not served properly with the initial lawsuit, you may be able to reopen a judgment and raise the Statute of Limitations and other defenses.

The four-year Statue of Limitations on contracts does not apply to first mortgages. There is no statute in Pennsylvania requiring a mortgage lender to foreclose within a certain time period after a default. Although there is an argument that the 20-year Statute of Limitations on documents under seal should apply to mortgage loans, that issue is not settled. However, after a sheriff’s sale, the mortgage lender has only six months to seek a deficiency judgment.

Quick Note: Unlike a first mortgage, the four-year Statute of Limitations applies to a second mortgage or subsequent mortgage that has a remaining balance after a sheriff’s sale. When a second mortgage is not paid in full from the proceeds of the sheriff’s sale, it becomes an unsecured personal debt (like a credit card or personal loan). The Statute on that debt runs from the date of the last payment made on the second mortgage, not from the date of the sale. 

The four-year Statute of Limitations does not apply to taxes, civil fines, criminal fines, federal or federally-backed student loans, or domestic support obligations. For the most-part, the Statute does not apply to government obligations.

Quick Note: Although federal student loan lenders can bypass the Statute, the four-year Statute of Limitations does apply to private student loans (i.e., loans that are not issued by or backed by the government) and most non-student loan tuition debt. Not surprisingly, debt collectors have been know to lie about this fact.

Using the Statute to stop vulture debt collectors

What should you do if a debt collector tries to collect on a debt after the Statute of Limitations has run out? Because they count on debtors not knowing their rights, it is often enough to write to the creditor to demand (1) validation of the debt (essentially proof that the debt exist and that the creditor owns the debt) and (2) proof that the Statute of Limitations has not run out.  They will generally move on to another victim. Of course, if you talk to or write to a creditor, do not admit to owing the debt, make a payment, or agree to make a payment.  If you do, you may compromise your Statute of Limitations defense.  

Quick Note: Creditors and debt collectors will lie to you. Do not trust a debt collector who tells you that the Statute of Limitations does not apply, that another state’s longer Statute applies, or that you made a payment that you do not recall. Check your own records and obtain the assistance of an attorney, if necessary.

What if the debt collectors still will not stop? If the Statute has run, and the collectors persist in trying to collect, you may have a case against them under the federal Fair Debt Collection Practices Act (“FDCPA”) and Pennsylvania’s Fair Credit Extension Uniformity Act. (Note that if a debt has been discharged in Chapter 7 or Chapter 13 bankruptcy, the Statute of Limitations does not apply, and any attempt to collect the discharged debt is a violation of the Bankruptcy Code and, possibly the FDCPA.)

Knowing your rights can help you keep unscrupulous debt collectors at bay, and sometimes make them pay.

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109 comments to The Pennsylvania Statute of Limitations on Debt Stops Vulture Debt Collectors

  • Meisey

    I have an unpaid debt from back in 2004-2005, which I did not pay. I recently got a copy of my credit file which shows ‘no credit defaults, no judgements, no insolvencies etc.” However the debt collection agency re-activated the date in October 2013, and its showing in the ‘file activity’ section as a debt enforcement. Can the debt collectors do this?

    • You are describing a practice known as “re-aging” a debt, whereby a creditor falsely claims a new last activity or payment date on the claim. This practice is illegal under the Fair Credit Reporting Act (“FCRA”). Under this act, the creditor can only report truthful information and then for a certain period of time. Most attorney’s who work in this area of law will tell clients to dispute such entries to the credit bureaus in writing (not online) and keep the proof of delivery. If the entry is not corrected, the debtor may have a cause of action against the creditor and, perhaps, the credit bureaus. Any debtor who is the victim of re-aging should speak to a consumer attorney immediately.

  • Chuck

    Does the Statute of Limitations apply to unpaid state business taxes?

  • Crystal

    I just received a debt collection for a bill that was last paid in 2005. I said I could make payments but they declined wanting full payment. In 2012 I cleaned up my credit and this debt was not on my report. Could they add it even though it’s time barred?

    • The Statute of Limitations has nothing to do with the credit reporting period. A creditor can report accurate negative information for seven years from the date the debt became delinquent. However, if the creditor reports the debt for longer than 7 years or tries to “re-age” the debt by reporting a new last activity date, it is most likely a violation of the federal Fair Credit Reporting Act and can result in the creditor paying the debtor statutory damages and attorney’s fees.

      The other issue here is the fact that you offered to make payments on a debt that is most likely beyond the Statute of Limitations.You should never pay or make an offer to pay a debt that is beyond the Statute of Limitations without first consulting an attorney. By making a payment or an offer to pay, you may reset the Statute of Limitations. You should speak to an attorney before speaking to this creditor again.

  • JT

    I had my car repossessed and a judgement was filed in 2008. In 2014 they executed a writ on my bank account and they received some money from that. How long will this judgment stay on my credit report going forward? I have made attempts to reach out to this creditor but they are unwilling to work with me on this.

    • Generally, a judgment remains on a credit report for 7 years. However, the judgment creditor has 20 years to collect against the debtor’s personal property (including money in bank accounts). Moreover, the judgment becomes a lien on the debtor’s real property in the county of judgment and can be transferred between counties. There is no specific time limitation on real property liens. (Under Pennsylvania law, a creditor can lose priority over other creditor liens on real property, if it does not revive the judgment every five years. However, this provision does not prevent the creditor from collecting against the debtor.) You should speak to an attorney about debt negotiation and other options for resolving this debt. Creditors often refuse to work with unrepresented debtor but sing a different tune when the debtor is represented by an attorney.

  • John

    I have a judgment from 2005 that’s been sold to a third party. Does this change the laws regarding its enforcement?

    • The Statute of Limitations applies to a subsequent buyer just as it would to the original creditor. The Statute runs from the date of the last payment regardless of who later buys the debt. Moreover, when a debt is sold, it does make the debt much more difficult to enforce in court (if the debtor raises a defense). Debt buyers often have difficulty proving in court that they own the debt, and debtors often win such cases.

    • When a debt is sold to a third party, the debt buyer will often have great difficulty enforcing the debt in court. Debt buyers frequently lack the documentation and witnesses to show in court that they own the debt. For that reason, debtors who contest such cases often win. (Note also that the debtor defending such an action can also raise any defense against the debt buyer that the debtor could have raised against the original creditor.) Bad debt buyers count on people failing to defend the case. Sadly, over 90% of the time debtors do not defend these cases when sued and simply accept a default judgment. An attorney can asset you in evaluating this debt.

  • Kenneth

    Hi Dan — I read that once the statute of limitations has expired is some states, it can be “revived” if you acknowledge the debt. Most states say it has to be acknowledged in writing to count, but some states are unclear about what constitutes acknowledging a debt. In Pennsylvania, can a debt be revived if it’s acknowledged in a conversation, or does it have to be acknowledged in writing (like a promise to pay with a signature)? Thanks for your help.

    • In Pennsylvania, an acknowledgment of the debt can reset the Statute of Limitations. However, the acknowledgment must be clear and convincing. Although the law does not specify a signed writing, it is high standard for a creditor to meet. A signed promise to pay would almost certainly meet this standard. However, vague statements to the creditor in the course of a phone conversation probably would not.

  • Jay

    Hi Dan…I just received a phone call from a debt collector for a personal loan debt from 2002. How would I be sure they did not [file a judgment against me]?

    • You can search the dockets of the courts in all of the city and counties where you have lived since taking on this debt (Magisterial, Municipal, and Common Pleas courts). Most of the larger cities and counties have online docket and judgment searches. In addition, you should pull all three of your credit reports from the major reporting agencies. (You can do so for free once a year at http://www.annualcreditreport.com. If there are judgments against you, they may be listed in the public records section of the reports, although they generally drop off after 7 years. Taking these steps is no guarantee that there is no judgment somewhere else, but it is unlikely. In any case, do not make a payment or negotiate with the creditor without discussing the matter with a local attorney.

  • Sean

    Does the 4 year statute apply to college loans?

  • Dennis

    I have a quick question. I was sued by [a creditor]. The creditor’s lawyer never showed up for the hearing. The judge ruled in my flavor since they didn’t show up. Can I be sued again for the amount, and do I have to still pay the bill? Please help

    • I cannot comment on your specific case, and you should consult local counsel. However, if a case is dismissed “with prejudice”, the creditor cannot file suit again. If the case is dismissed “without prejudice”, the creditor can refile the suit. The dismissal order should specify which. (The creditor may be able to appeal the judge’s ruling, but they have a short time-frame in which to do that.)

      Note that when a debt is sold, it is not at all unusual for debtors who defend the cases to win. Often the creditor cannot show in court that it owns the debt, and the judge will simply dismiss the case. Many debt buyers simply play the odds that the debtor will not show up, and they can obtain a default judgment. For that reason, it is important to consult an attorney immediately anytime a creditor files suit against you. Many collection cases are winnable, as you have shown.

  • Ryan

    What is the Statute of Limitation to file a lawsuit to collect on auto deficiency in Pennsylvania?

  • Kelly

    Hello,

    Do the 4 year statute of limitations and 7 year limit reporting to credit bureaus apply to medical bills?

  • ED

    Dan,

    I have … credit cards which are in various stages of collection. Several are in the court … We have filed responses. They are sitting there with no responses from the credit companies for 2yrs. Several have gone in front of local district courts for collection. Am I correct, that if a judgement is not issued before the 4yrs of the SOL, that the credit company will not be able to collect the debt as unenforceable. The debts were last paid in Oct 2010.

    • Ed,

      The Statute of Limitations does not require that a judgment be entered within four years. Rather, the creditor must simply file suit against the debtor within four years. Once the case has been filed, the Statute stops running (assuming that the creditor ultimately obtains proper service on the debtor). For that reason, a debtor who has a Statute of Limitations defense must raise it in response to the lawsuit and must show that the Statute ran out before the suit was filed. You should discuss these matters with an attorney who handles debtor defense.

      Dan

  • Lisa

    I have been get harrassing threatening phone calls regarding they are coming to my house or employment delivering papers. I gave one person already 300 dollars. I am afraid this is a scam and they keep calling me.

    • Lisa,

      Never make a payment to someone claiming to be a creditor based upon a phone call. Rather, demand proof of the debt in writing. If the “creditor” refuses to support its claim with documentation, it is most likely a scam. Note that even if the collector sends a demand letter, the letter in itself is not sufficient proof of the debt. You have the right to demand validation of the debt (documentary proof of the debt) within 30 days of receiving such a demand.

      If it is not a scam, it may be a vulture collector trying to collect on an old debt that is beyond the Statute of Limitations or for which is has insufficient documentation. If the debt is legitimate but beyond the Statute of Limitations, making a payment may reset the Statute and leave you on the hook for the debt again. Therefore, you should consult an attorney before making any payment, even if the debt appears to be legitimate.

      As for the calls, debt collectors must stop calling a debtor at work, if the debtor tells them not to do so. (It may be necessary to put such instructions in writing, if calls persists.) In fact, under the Fair Debt Collection Practices Act, debt collectors (not necessarily original creditors) must cease essentially all contact with a debtor, if the debtor instructs them in writing to stop.

  • shawn

    I defaulted on [a] loan but started making payments to [the creditor’s lawyer]. Does the SOL apply to the last payment to the original creditor or the lawyer? Also can they agree to a payment plan then all of a sudden change it and want full payment at once?

    • Shawn,

      The Statute of Limitations runs from the last payment to any party rightfully owning the debt or representing the party owning the debt, including the original creditor, subsequent purchasers of the debt, collection agents, the creditor’s lawyer, or the collector’s lawyer.

      As for the a creditor changing the amount or terms of a settlement agreement without your consent, it depends entirely on the terms of the settlement agreement. I suggest that you have a lawyer review the agreement. Any agreement with a creditor needs to be in writing in terms that you understand.

      Dan

  • Gabe

    Does the Statute of Limitations apply to court costs fines and restitution? Thank you

  • John

    My question is does the Statute of Limitations of 4 years in PA apply to mortgages as well.

  • marilyn

    There are things on our credit report way over the 4 year Statute of Limitations in PA. How long do the 3 credit reporting agencies have to remove them. Also I have never been contacted by these people, yet they update [the credit report] to a more recent date. Is this legal?

    • Marilyn,

      The Statute of Limitations has no bearing on how long negative information may be reported to the credit bureaus (generally 7 years). The Statute simply prevents a creditor from enforcing the debt in court. However, “re-aging” a debt by changing the last activity date when the debtor did not make a payment is illegal. Reporting false information to the credit bureau is a violation of the Federal Fair Debt Collection Practices Act and can result in damages and attorney’s fees.

  • Robert

    Hi Dan,

    I have a credit card debt that is beyond the Statute of Limitations. The collection letters do not come often, but they do come occasionally and they mostly appear to be a fishing expedition . . . [T]he letters offer to settle my debt completely – all I have to do is pay a fraction of what they say I owe. Both debts also have this language as a subtext

    “the law limits how long you can be sued on a debt. Because of the age of your debt, we will not sue you for it. If you do not pay the debt, we may continue to report it to the credit reporting agencies as unpaid”

    Should I ignore these letters or should I send a letter stating “The statute of limitations has expired on this debt. Please stop contacting me regarding it.” What happens to the debt if it is never paid? Are debts removed from credit reporting agencies after a certain time frame?

    Thanks for you help!

    • When a creditor uses this type of language, it usually means that it is aware that the Statute of Limitations has run out on this debt, and therefore, suing on the debt would likely be a violation of the Federal Fair Debt Collection Practices Act and related Pennsylvania law. I cannot comment on your specific situation in this forum. However, writing to a creditor to demand validation of a post-statute debt (not just “verification”) and proof that the Statute of Limitations has not run out, will often prompt the creditor to move onto someone else.

  • Edward

    I received a subpoena from a debt collections lawyer in PA. The debt was from 2003 and they filed a judgement in 2008. No payments have been made since 2007.But there is no where on my credit report that this debt is listed. It was a CC debt.I called and told him the SOL ran out, but he said the SOL is twenty years. I’m confused. Thanks, Edward

    • Edward.

      There is much confusion on this point. The Statue of Limitations on debt does not apply to judgments. Once a creditor obtains a money judgment, it has 20 years to execute against the debtor’s personal property. For that reason, if a creditor sues a debtor after the Statute of Limitations runs out, it is critical for the debtor to raise the Statute of Limitations defense in response to the lawsuit. That being said, you may have other defenses to this collection action and in some instances judgments may be reopened. You should speak to an attorney who handles debtor defense to discuss your options.

      Dan

  • Sandy

    Hi Dan, One quick question. I live in PA but some creditors live out of state. Does SOL apply from PA, where I live, or where the company does business?I did live in PA, but credit card companies usually use main offices in other states. Thanks!

    • Sandy,

      Which state’s Statute of Limitation applies is determined by the contract and the law of the state where you are subject to suit (typically where you reside). For example, Pennsylvania has a “borrowing statute.” Therefore, if the contract specifies that the Statute of Limitations of another state applies, the court will apply either the Pennsylvania statute or the statute specified in the contract, whichever is shortest. However, the courts in your state may reach another result. You will need to consult a local attorney.

      Regards,

      Dan

  • William F Holinka

    What should you do if a debt collector tries to collect on a debt after the Statute of Limitations has run out? Simply, tell the debt collector in writing that the Statute of Limitations has run out on the debt and instruct the collector not to contact you again. Because they count on debtors not knowing their rights, it is usually enough to let collection agencies know that you are aware that the Statute of Limitations has run out . . ..

    Sincerely, William

    • I cannot advise you on your specifics case. However, in general, debt collectors are counting on the debtor not knowing that the Statute of Limitations has run out. If the debtor has not made a payment in the statutory period or otherwise tolled the Statute, it is often enough to demand validation of the debt and proof that the Statute of Limitation has not run out. Of course, it is not unusual for the debt to be resold at a later date, requiring the debtor to deal with a new debt collector. You should speak to an attorney before taking action on your own.

  • John

    Hello Dan. My name is John. My question is for SOL on Judgments. I have a law firm contacting me about an alleged debt. I sent them a request for validation and they sent back a copy (not a very clear copy) of a judgment dated 2006 for a different company then who this law firm represents. The law firm is representing a different company who is not list on the judgment papers. The SOL has expired and there has not been any type of writ of execution.Since this law firm is representing a different company does this judgment still stand and does the SOL still apply?

    • John,

      A creditor has 20 years to execute on a judgment against your personal property. In that time, the debt may be sold over and over. This 20-year period follows the debt and is not limited to the original creditor. The four-year Statute of Limitations on debt does not apply to judgments. That being said, when a debt is sold, it can sometimes become difficult to enforce. You may wish to discuss the matter with a local Pennsylvania attorney who handles debt matters.

      Dan

  • Robert

    Hi,
    I recently received a call from a collection agency. They are claiming that PA goes by the charge off date which in my case would be November 2009. I last made payment in June of 2008. Is it the last time I made a payment or the charge of date on the account?
    Thank You for any help in this situation.

  • Keith

    Hi. Quick question.

    Is there any ‘rule of thumb’ about the minimum size of a debt that collectors use to guide them about whether it is worthwhile to sue?

    Thanks

    • Keith,

      Creditor’s policies regarding filing suit vary widely. To some extent, the larger the debt, the more likely you are to be sued. However, in my bankruptcy and debt practice, I see plenty of lawsuits and judgments for very small amounts, even less than $1000. With attorney’s fees and costs added, these smaller debts can add up quickly. Moreover, when the debts are sold (often for pennies on the dollar), the purchaser may be more willing to file suit than the original creditor.

      Dan

  • Sara

    Hi Dan,

    My apologies if this has been discussed … but would the SOL still be 4 years for a private student (Sallie Mae) loan that is charged off and has been shuffled amongst many debt collection agencies..? I know things get tricky when loans are involved, so I just want to validate my thoughts with an expert.

  • Bill

    Hi Dan, I found your expertise to be very enlighting. One quick question, does this statute also apply to old parking tickets, assuming they are past the stature of limitations?

  • Jason

    Hello, For the past week my wife is getting phone calls from a debt collector looking for payment on some medical bills from 2004. These were placed on her credit report at that time and have since came off due to being over 7 years old. Now this company is saying they will report her the credit agencies again, are they allowed?

    • Debt collectors have been know to attempt to “re-age” debts. However, positing false information to a credit report may be a violation of the Fair Credit Reporting Act. In addition, if a debt collector threatens to take an action that it is not legally entitled to take, it is a violation of the Fair Debt Collection Practices Act and the Pennsylvania Fair Credit Extension Uniformity Act. Both of these acts provide for damages and attorney’s fees. You should speak to an attorney familiar with the FCRA and FDCPA.

  • Erin

    Hello Attorney Mueller,

    I’m going to be getting married soon, and my future husband has some outstanding bills that creditors have been coming after him for. They are now sending mail to my home. I noticed that one bill is for an eletric bill that’s dated from 2007. Can they still go after him for that? Also, once we get married, can they come after me for any of his debt and vice versa?

    Thanks so much for your help, I really enjoyed your article!

    • Thank you for your question. In Pennsylvania, one spouse is not generally responsible for debts that the other spouse incurred prior to marriage. In addition, joint property of a married couple is typically protected from execution by a creditor of only one spouse, under the doctrine of “tenancy by the entireties.” (Although a judgment creditor of one spouse can obtain a lien on that spouse’s interest in jointly held real property, it cannot do anything with it as long as the couple is married and does not sell or transfer the property.) Moreover, unless the creditor has already obtained a judgment, a debt of this type that has not been paid in more than four years is most likely beyond the Statute of Limitations.

      I generally recommend clearing up any financial issues before marriage, particularly if one of the parties needs to file for bankruptcy. Both spouses’ incomes count as household income in a bankruptcy filing. Therefore, marriage can prevent an individual from qualifying for bankruptcy. Your fiancé should speak to a bankruptcy attorney about resolving these debt issues.

  • Jeremy

    Dan,

    My wife received a hand-written letter from an individual claiming that [she and her former husband] owe him [a certain sum of money] from an oral loan agreement. My wife’s former husband passed away, and she has no recollection of this loan, which would be at least 10 to 12 years old. Would the SOL apply in such a case.

    Thanks!

    • Jeremy, I cannot comment on your specific situation, but the four-year Statute of Limitations does apply to oral contracts, just as it would to a written contract. (See 42 Pa. Cons. Stat. § 5525(3)) In the case of an oral contract, there may be additional reasons why it would be difficult to enforce. Oral contracts (sometimes called “verbal contracts”, although all contracts are verbal), can be difficult to prove. In addition, the the Statute of Frauds requires that certain types of contracts be in writing, but that is another post. Dan

  • Franne

    I originally owed a credit card $15,000. The case went to court [in 2008] and the district judge awarded the credit card company $2K. Do I still have to pay the judgement … since [it will be more than five years since the judgment was entered]?

    • There is a lot of confusion about the five-year judgment renewal provision under Pennsylvania law. In fact, a creditor has twenty years to collect a judgment. During that time it may obtain a writ of execution and levy your non-exempt personal property and potentially execute against real property. However, if the creditor has a lien on your real property, and the creditor does not revive its judgment every five years, its lien loses priority over other creditors. You should speak to a consumer or bankruptcy attorney about resolving this matter.

  • Dan

    Dan,

    I lived in Vermont and moved to PA in 2009. [Last payment made to creditor in 2008] My question is will the SOL become effective for me [in 2013] (my fourth year in PA), is it already in effect since I am a resident of PA or does it fall under Vermont law (which has a 6 year SOL)? Thanks for any information.

    • You do not mention the type of debt. However, Pennsylvania has a borrowing statute that applies the shorter of the available Statutes of Limitations. Thus, if a debt is one for which Pennsylvania has a four-year Statute of Limitations, and another state has a six-year Statute of Limitations,the Pennsylvania courts would typically apply the four-year Pennsylvania Statute of limitations.

  • Brian

    Hi I took a web payday loan out [more than five years ago]. I got a call from a guy claiming to be an attorney … [who] said I defaulted on the loan. I asked why am I just hearing about this he replied that letters were sent. I got nothing. He called my house, my moms work and my cell. I explained I am on social security disability and a fixed income and his response was I don’t pay my bills. He said legal action will be taken. This guy has all my contact information after all these years. Can he do anything being this is well past 5 years?

    • The four-year Statute of Limitations on contracts applies to payday loans (unless a shorter statute from another state applies). Moreover, payday loans are generally unenforeceable in Pennsylvania, because there is a cap on interest rates that makes such loans essentially illegal. Payday lenders are notorious for their sleazy collection tactics, including falsely threatening people with criminal prosecution, claiming to be an attorney, threatening wage garnishment, etc. Rather than speaking to these sleazy collectors, speak to a lawyer.

  • In 2007 I defaulted on an auto loan and it was repossesed and sold. [In] 2013, I was contacted by a collection “hired by the creditor. . ..” I’ve been reading the questions/answers on this web site and it appears this account is now uncollectable. The only issue I can see with this is that there is a claim that I paid on this account [in] 2012 which I know I didn’t. Can I still tell them the Statute of Limitations in Pennsylvania is up on this account or do I now have to prove I didn’t pay on this account? Thanks for you help in this matter!

  • lucy

    My husband did a debit consolidation 2 yrs ago last paying in dec 2012. It was for 3 credit cards. One of the creditors is now taking him to court for what is owed. He has not paid that creditor directly for at least 4yrs. Can he still use the defense of SOL?

    • A payment made to a creditor through a debt consolidator or “credit counseling” is treated the same as a payment made directly by the debtor. However, it is not uncommon for such agencies to withhold payments and simply accumulate cash in an account (with the purported goal of eventually making a lump-sum offer to the creditor). So, it may be worthwhile to get an accounting of all payments the agency made to creditors.

  • Charlotte

    I had a credit card in 1998. The last transaction on it was in 2008. I received a call 4 days [ago] from someone claiming that they needed to know if someone would be home to receive a subpoena. Should I be concerned with it being the statute of limitations is out?

    • Creditors do sometimes file suit after the Statute of Limitations runs out with the goal of obtaining a default judgment. However, the Statute of Limitations is a complete defense, if the lawsuit is filed after the statutory period has elapsed. That being said, the debtor must raise the Statute of Limitations as a defense to the lawsuit. If the debtor does not raise the Statute in response to the lawsuit,the defense is most likely waived.

  • Tim

    Hi Dan, Does the SOL also apply to loans which were made to a corporation and personally guaranteed by an officer? Thanks

  • Gary

    Good Morning Dan.
    I have found your article very interesting and helpful. My question is if a letter is sent to the collection agency stating that the debt is beyond the statute of limitations, can they use that as an admission of debt? Also, if they are instructed to provide proof of the original debt, is this not also helpful for them to prove the debt and can it be used to restart any limitations? Thanks ! -Gary

    • Calling attention to the Statute of Limitations is not an admission, unless a debtor also admits to owing the debt. Nonetheless, it is a good idea to note that you dispute the debt in any correspondence.

      Likewise, a demand for proof of the original debt is not an admission and does not restart the Statute. Of course, it is possible that a creditor will be able to provide evidence that shows that the Statute has not run out (for example, if you believe you have not paid on the debt for 4 years, but the creditor can show that you made a payment 2 years ago). Thus, it is a good idea to check your own records first. However, the more times a debt is sold or moved between collectors, the more difficult it will be for a creditor to provide sufficient documentation of the debt.

  • Michelle

    I have an old debt through [a creditor] from 2008. There has been no payment made since then, nor any promise to pay. I have a separate account trough the same company for my home that is current. Last week a debt collector reported the account to experian. Is that legal?

    • The Statute of Limitations deals with enforcing a debt, not credit reporting. Therefore, even though a creditor may not be able to enforce a debt in court after the Statute has run out, the Statute does not prevent the creditor from reporting the debt to the credit reporting agencies. Typically, under the Fair Credit Reporting Act, creditors may report negative credit information for seven years. Of course, there may be other reasons why the reporting is improper, which you would need to discuss with an attorney.

  • Destiny

    Hi! I’d like to make sure I have a proper understanding of SOL. In Oct. of 2009 my vehicle was repo’d. It was since auctioned off. The original creditor sold the debt to another lender who subsequently sold it to a collection agency who has now sold it. [The new creditor is threatening to sue.] The last payment made to the original creditor in Mar. of 2009, but I have made payments to the collection agency. Is the date of SOL extended due to my payment to the collection agency?

    • Hi Destiny.

      For the purposes of the Statute of limitations, it makes no difference whether you made payments to the original creditor, the subsequent purchaser of a debt, or the purchaser’s agent. However, I should note that when debts are sold, the paperwork is often shoddy. Therefore, it is not unusual for the purchaser to have difficulty proving in court that it owns the debt. You may wish to review your case with an attorney.

      Dan

  • Jean

    If a car was repossessed in 2006, can an attorney attach my checking account …?

    • Jean,

      First, the creditor must sue you and obtain a judgment. In Pennsylvania, once a creditor obtains a judgment, it has up to twenty years to execute against personal property (such as a bank account) in order to satisfy a judgment. You should speak to an attorney right away to see if there are any issues that would allow you to reopen the lawsuit or stop the levy.

      Dan

  • Paul

    I understand the 4-yr Statute of Limitations for trying to collect the debt, but what about reporting to the credit bureaus? Is that 4 also or is it 7yrs?

  • Kara

    I have a credit card debt from early 2006 I received a “subpoena” today but the file date on it is 2008, I think they are attempting to scare me. The forms do not look valid to me. If they filed and never took action upon the debt does the statute of limitations still apply?

    • If a creditor files suit and does not serve the debtor with the summons and complaint within the required time period (or obtain substitute service after reasonable attempts at service fail), the case should be dismissed. If service is not made within the Statute of Limitations period, the debtor retains a potential Statute of Limitations defense. You need to review the case file with an attorney to determine the status of the case.

  • Gary

    I lived in housing authority [property] 10 years ago, and I was evicted. I have recently started getting notified that I owe the housing authority [a certain amount]. Is this covered under the statue of limitations?

  • Chuck

    I am an American citizen that lived in Germany . . . I owned a home that was forclosed upon and then resold in Germany. I have been back in Pa for eight years now, and have just received a letter from an American collection company saying that I owe the full amount of the loan. My German wife isn’t even in the letter. Does the statute of limitations apply since I live in Pa?

    • Chuck,

      I am not familiar with the German foreclosure process and whether it results in a deficiency judgment. However, whether the Statute of Limitations applies depends on whether the creditor has obtained a judgment. If the creditor already has a judgment, the Statute of Limitations on debt does not apply. Moreover, judgments from other countries are enforceable in Pennsylvania under the Uniform Enforcement of Foreign Judgments Act, 42 Pa. Cons. Stat. Ann. § 4306. That being said, enforcement of an overseas judgment is a rather complex procedure that may leave you a number of avenues to fight enforcement.

      If the foreign creditor has not obtained a judgment and sues you in Pennsylvania, then, under the state’s Uniform Statute of Limitations on Foreign Claims Act, the court will apply either the Pennsylvania or the foreign (“foreign” meaning outside Pennsylvania) Statute of Limitations, whichever is shorter. (42 Pa. Cons. Stat. Sec. 5521(b)).

      This is only a brief overview. You should consult an attorney for specify legal advice concerning your case.

  • Mark

    Hi Dan,
    I have noticed on my credit report that several debts have been reported twice. Once by the original creditor and then again by the collection agency. Which is used for the Statue of Limitations? I have tried to dispute these with the credit bureaus using the SOL as my reason, but they remain on my report. Both the Original Creditor and the Collection Agency…Any advice as to how to get these removed?

    Thanks,

    Mark

    • Mark,
      The Pennsylvania Statute of Limitations runs from the date of the last payment, regardless of whether that payment was directly to the creditor or to a subsequent debt buyer or debt collector. As to your second question, the Statute of Limitations makes a debt noncollectable in court, but it does not prevent accurate credit reporting for up to 7 years, as allowed by the Fair Credit Reporting Act (“FCRA”). If there are inaccuracies in your credit report, and the creditors and credit reporting agencies are not responsive, you may wish to consult an attorney to see if there are violations of the FCRA.
      Regards, Dan

  • JOE

    My question is, I have some debt from around 10 years ago. The debt collectors are still putting it on my credit report. Is there a limitation on credit reporting.

    • Joe,

      Without getting into too much detail, under the federal Fair Credit Reporting Act (“FCRA”), the time limitation for reporting most negative information to the credit bureau is 7 years or 7 years plus 180 days. (If you have a charge off, the reporting starts 180 days after the first delinquency that led to the charge off.) If a creditor continues to report negative information after the time limit has expired, it may be a violation of the FCRA and can result in an award of damages and attorney’s fees.

      Dan

  • Hi Dan,
    I had a suv repossessed about 4 years ago. It may be over the time period but I am not sure how to find out when I last made a payment. Also I received a certified letter today saying I owed them over $14,000, and if they are forced to take further action I will be required to pay any other cost on the existing judgement. It scares me, so I dont know if they are going to sue me or if I should contact them. Please help!.thanks
    Jessie

    • Jessie,

      It can be problematic obtaining records from the original creditor. Therefore, you may wish to obtain a free copy of your credit report from http://www.annualcreditreport.com. It should list the last date of payment. However, some creditors and debt collectors will submit false information to the credit bureaus to “re-age” accounts in an attempt to avoid a Statue of Limitations defense. For that reason, your own bank records may be the best source.

      Note that if you are sued, you must raise the Statute of Limitations defense in your response. If you do not, you may have waived it. Moreover, you may have other defenses and counterclaims. Therefore, you should speak to an attorney now, rather than waiting until the creditor sues you. You may benefit from debt negotiation or bankruptcy.

      Dan

  • Jody

    I have a debt from 2006 and the last payment made was October 2006. I received a call four times from the creditor stating they were going to sue me. Five minutes later, I received a call from my local sheriff department asking for my employers address to serve a $7000.00 debt execution paper to me. Is it too late to let the creditor know that this is considered “state statutes of limitations for old debts”?

    • Jody,

      You should discuss this matter with an attorney right away. Unless the creditor has sued you and obtained a judgment, it cannot “execute” on your property. In addition, keep in mind that debt collectors often impersonate police, attorneys, government officials, etc. in order to frighten debtors into paying or to obtain useful information. An attorney can help you determine if the debt is outside the Statute of Limitations, and if debt collector has violated the Fair Debt Collection Practices Act, Fair Credit Reporting Act, Pennsylvania Fair Credit Extension Uniformity Act, and other laws.

      Regards, Dan

  • Adam

    Dan, as a resident of the state of Pennsylvania for several years, I have become aware of several different aspects and pieces of information regarding debt collection.

    My case is an unusual one being that a company has not only split my bill, but they have proceeded to send both parts of the bill to separate collection agencies. Being that this has happened, I made a settlement for the main bill back in 2009 and have since continued to receive phone calls and letters regarding this “secondary” account. The payment was made via check and I do have the registry in which it was made from as well as a carbon-copy of the check that I mailed to the creditor of whom I sent the payment to.

    I have disputed this charge as it seems a little suspicious as to why the bill would be split after I had made the payment to the one company whom had offered a settlement to me and I accepted. Although I know it’s not the best thing for my credit to accept a settlement, I just wanted to get them off of my back.

    Now it just seems like the company took the remaining of what I WOULD have owed if I had not taken the settlement and shipped it off to another collection agency.

    What can I do about this?

  • Kristen

    I noticed an old debt on my credit report that was recently bought by a collection agency. I did not receive any letters of the debt in the mail from the collection agency, however it is on my most recent copy of my credit report. Since it is on my report and I didn’t receive any communications, is it too late to validate the debt? Thanks, Kristen

    • Hi Kristen. The credit validation requirement kicks in after the collection agency first contacts you. Under the Fair Debt Collection Practices Act (“FDCPA”), the credit reporting agency is required to send you a letter of validation within five days of first contacting you. You then have thirty days to respond. If you dispute all or part of the debt, the collection agency has thirty days provide verification. If it cannot provide verification in this time period, it must cease collection efforts. That being said, you can dispute all or part of a debt at any time. Regards, Dan

  • Cindy

    Hello. Our business has just received a collection letter from an attorney … requesting that we pay a Pennsylvania [construction supply] company over $12,000 for [supplies] ordered back in 2007. No payments have been made since November of 2007 and no invoices from the concrete company since early 2008. (We initiated a legal suit for faulty [supplies] and nonpayment from the sub) Are we liable to pay the collector? Or does the statue of limitations take effect via the date of last payment?
    Thank you

    • Hi Cindy.
      In general, assuming Pennsylvania law applies, supply agreements fall under the four-year statute of limitations for contracts for the sale of goods (unless the contract provides for a different term). That being said, you cannot assume in a sales contract that the statute runs from the date of the last payment. If there is a specified date of performance (e.g., payment must be made by a certain date), the statute does not start running until after the performance date. If the contract specifies payment on demand, then the Statute may run from the date of the contract. In addition, in construction cases, there can be supplier and mechanic’s lien issues. These remarks are general in nature, and I cannot advise you on your specific case in this forum. I suggest discussing your case with a lawyer as soon as possible.
      Regards, Dan

  • Matt

    Dan,
    I want to clarify something. When does the clock start ticking for the Statute? Is it from the time that the debt collectors start the collections? Or from my last payment period. I have a Dell financial account that was last paid in 2008, however circumstances beyond my control prevented me from paying further, hence the collection agency. So I assume that my last payment to Dell financial started the Statute of Limitations. Am I correct? Any help would be appreciated, Matt

  • Annie

    i recently received a collection notice for a bill that is over ten years old. how do i tell them that the statute of limitations has run out without admitting to owing the bill? What should I say to them to get them to leave me alone?

    • Hi Annie. It should be sufficient to write to the creditor and state that the Statute of Limitations has run out on the debt. You need not admit anything. They are hoping that you are unaware of the protections afforded by the Statute. Some vulture-type debt collectors may require the intervention of an attorney, but often they will simply move on to someone else. Regards, Dan

  • Margie

    Hi! I read this, and it seems pretty clear cut but I want to know if it applies to my case. I received a collection notice from an agency trying to collect on a debt for a landline telephone account that was open in July 2003 and last paid in January 2004. First and foremost, this is not my debt. I had lost wallet in June 2003 and it appears to me as if the person who found it used my information to open this phone account. I replied to the collection agency and disputed the debt due to identity fraud. Now, they have sent me a thick packet of papers and want all sorts of documentation to “aid in their investigation” into my fraud claim. Before going into all this I decided to look into whether or not they can even attempt to collect this debt. It is only a $75 so I was tempted to pay it, but why should I if it’s not mine? Can you please offer a little insight into how I can handle this?

    • Hi Margie. Thank you for your comment. Although I cannot advise you on the specific facts of your case, I have some general comments. First, creditors will often back off when the debtor notifies them in writing that a debt is beyond the Statute of Limitations.

      Second, the Statute of Limitations does not prevent a creditor from reporting the debt to the credit bureaus. Therefore, if there is an issue as to whether the debt actually belongs to the purported debtor, it may be worthwhile to try to clear it up by notifying the creditor (as you have done).

      Third, although the creditor may need some information to determine who is responsible for the debt, a creditor’s “investigation” of a debt should never be a fishing expedition into a debtor’s personal finances. Creditors will sometimes use the pretext of an investigation to find information, such as income, where the debtor banks, etc., which they can use in a later collection action. When dealing with debt collectors and creditors, be careful what you reveal.

      Regards, Dan

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