Statute of Limitations
The statute of limitations refers to the legal time limit a debt can be collected. This time limit is different depending on the type of debt. I thought it important to discuss this as I am finding an increasing number of collection agencies trying to collect on debt that is older than its statute of limitations.
How this has happened is that some collection companies purchase this debt from old lenders for pennies on the dollar and attempt to collect on expired debt through harassing phone calls, letters, or even lawsuit. The individuals they are trying to collect from often are unaware that this debt is past the statute of limitations and therefore collection is unenforceable through the court system.
The time limit for the statute of limitations varies from state to state and claim to claim. It is also possible to bring multiple actions for a single debt or conduct. This means that even if one statute of limitations has expired on one cause of action, for example a breach of contract, it may not have expired on a different cause of action, like fraud or unjust enrichment, for that very same debt.
In general terms, the statute of limitations on written contracts like mortgages, credit card debt or car loans is six years from the last payment made or contract breach. Fraud claims like 'embezzlement' or theft are also six years from the event. Medical malpractice is two years, whereas most other types of personal injury claims based on allegations of negligence, as well as products liability, the statute of limitations is three years. If a judgment is obtained, the statute of limitations on the judgment is ten years, and can be renewed by application to the court system after ten years for another ten year period.
Finally, a statute of limitations becomes "tolled,” or frozen, during a bankruptcy. If the bankruptcy is dismissed before being completed, the clock on the statute of limitations starts ticking again for the remaining time period of the claim as if the bankruptcy had never been filed. If the bankruptcy is completed and the discharge is granted, the debt is dismissed. | 
