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Statute of Limitations on Debt by State

Learn how to use your state’s debt statute of limitations (SOL) to remove charge-offs and collections accounts from client credit reports. Read on to discover:

  • Why consumers need a credit repair specialist to remove late payments from their report
  • How the collections and charge-off statute of limitations work in your favor
  • Each state’s statute of limitations for debt listed on a credit report

Charge-offs and Collection Accounts

Charge-offs and debt collection accounts show up on credit reports when consumers are several months late paying a bill. Both of these items show up on consumer credit reports as serious late payments — a heavily-weighted category of the credit score calculation.

  • Charge-offs occur when a consumer fails to pay long enough that the creditor chooses to count the debt as “charged off” and, most often, passes the bill along to a collections agency
  • Collections accounts are the second stop for late payments and indicate the consumer has a months-late payment

Most people are unaware that you can help them improve their score within months and help them afford a life they deserve.

Benefits of Credit Repair

When you learn how to remove items from a credit report, you help your clients to:

  • Qualify for loans that get them a car, house, or college education
  • Improve their day to day quality of life
  • Find freedom from debt collectors and bank fees
  • Understand financial habits that will help them for the rest of their lives

Credit repair changes lives. Here’s what you need to know about the statute of limitations on collections and charge-off accounts for your credit repair business.

how to start a profitable credit repair business

How Charge-Offs and Collections Statute of Limitations Help Your Clients

Laws that are on your credit repair clients’ side make your job easier. Instead of writing dispute letters to the credit bureaus or trying to get a negative item removed through a hardship letter, all you have to do is note the date of the collections account or charge-off.

If a derogatory account is past the statute of limitations, it must be removed. Old items cannot stay on your clients’ credit reports.

Learn the answers to these important statute of limitations credit report FAQs:

  • How do I know what type of account the derogatory item is?
  • Are the laws outlining the statue of limitations based on my client’s location or the creditor’s location?
  • What are the steps to remove an item that pre-dates the statute of limitations?
  • Do I need to write a separate letter to each bureau?

Types of Debt Collected

Oral Account

An oral account is a spoken or otherwise unwritten agreement by a debtor to pay back money owed to a creditor. These types of accounts are very difficult to prove, and therefore enforce, and are uncommon to come across on a credit report. If you do find oral accounts on your clients’ credit reports, they are usually simple to dispute and quick to remove.

Written Contracts

A written contract, even on the back of a receipt, can be enforced in court. Clients who have debts that are written contracts can dispute the items, and often you will be able to get written, unnotarized debt accounts removed. Most courts will not enforce an unnotarized written contract past a year.

Promissory Note

A promissory note is an agreement in writing with certain periods in which the debtor agrees to pay back an amount to the creditor. Your clients will have these for auto loans, student loans, or mortgages.

Open-Ended Account

Credit cards are the most popular form of open-ended accounts. Open-ended here refers to the time within which the debtor will pay back the creditor on for their revolving debt. Of course, the amount borrowed still needs to be paid back or it ends up in a collections account. You can still help your client to remove the debt from their credit report.

Which State’s Statute of Limitations to Follow

All of these factors bear on which statute of limitations you will follow:

  • Your client’s current and former states of residence
  • The creditor’s home state
  • Whether the client’s current state of residence has a short SOL on debt collection

The general rule of thumb is to follow the statute of limitations for the state in which your client currently lives. Creditors may attempt to pursue debt beyond the statute of limitations for that state if the state the debt was incurred in has a longer SOL. In that case, you may need to seek legal advice as to which state’s SOL you should use to argue for the debt to be removed from your client’s credit report.

How to Write a Collections Dispute Letter to the Bureaus

Credit bureaus and collection agencies are not in the business of helping consumers make their credit reports accurate or improving scores. Consumers are required to:

  • Carry the burden and manage their debt
  • Manage collections calls and letters
  • Ensure the accuracy of their credit report

Many consumers do not fully understand the reports and look for help with all of these items — which makes knowledgeable credit repair business owners like you a hot commodity.

Here’s where your credit repair business comes in to help consumers: you will research the statute of limitations for your state for the negative items on a client’s credit report. You will write a dispute letter to get the derogatory items removed. Clients will end up with higher credit scores and refer you to help others!

These are the steps you should follow to run a successful credit repair business:


Run a client credit report audit in Simple Audit to see which collections items are overdue and need to be removed from the report.


Create a priority list with your client and determine which collections accounts you will address first.


Write a Round 1 dispute letter on behalf of your client to each of the three bureaus noting the first three to five collections items to dispute.

Read this article for addresses and detailed instructions on writing a Round 1 dispute letter.


Over the next month, ensure that all correspondence from the bureaus is forwarded to your office and filed in your client’s account on Credit Repair Cloud.


After 30 days, see which items have been removed from your client’s report and send a Round 2 dispute letter for the others. Round 2 letters are sent directly to the creditor. The exact wording depends on factors like the amount of debt owed, the length of your client’s relationship with the creditor, client circumstances leading to the overdue payment, and the amount of debt owed by your client.

Learn how to write a Round 2 dispute letter for your clients.


Follow up with creditors and move on to the next set of three to five items to dispute with the credit bureaus on behalf of your client.

Learn your state’s statute of limitations to make your job easier and help more credit repair clients.

Statute of Limitations on Debt For Every State

Use your state’s statute of limitations to help more clients remove collections accounts and charge-offs from their credit reports.

Below is a list of the statutes of limitations on debt collections accounts and charge-offs for each state by contract type as of December 2018:

State Oral Written Promissory Open
Alabama 6 6 6 3
Alaska 6 6 3 3
Arizona 3 5 6 3
Arkansas 3 6 3 3
California 2 4 4 4
Colorado 6 6 6 6
Connecticut 3 6 6 3
Delaware 3 3 3 4
Florida 4 5 5 4
Georgia 3 6 3 3
Hawaii 4 6 6 6
Idaho 4 5 5 5
Illinois 5 10 10 5
Indiana 6 10 10 6
Iowa 5 10 5 5
Kansas 3 5 5 3
Kentucky 5 10 15 5
Louisiana 10 10 10 3
Maine 6 6 6 6
Maryland 3 3 6 3
Massachusetts 6 6 6 6
Michigan 6 6 6 6
Minnesota 6 6 6 6
Mississippi 3 3 3 3
Missouri 5 10 10 5
Montana 5 8 8 5
Nebraska 4 5 5 4
Nevada 4 6 3 4
New Hampshire 3 3 6 3
New Jersey 6 6 6 6
New Mexico 4 6 6 4
New York 6 6 6 6
North Carolina 3 3 5 3
North Dakota 6 6 6 6
Ohio 15 15 15 6
Oklahoma 3 5 5 3
Oregon 6 6 6 6
Pennsylvania 4 4 4 4
Rhode Island 10 10 10 10
South Carolina 3 3 3 3
South Dakota 3 6 6 6
Tennessee 6 6 6 6
Texas 4 4 4 4
Utah 4 6 6 4
Vermont 6 6 5 3
Virginia 3 5 6 3
Washington 3 6 6 3
West Virginia 5 10 6 5
Wisconsin 6 6 10 6
Wyoming 8 10 10 8

Adapted from State-by-State List of Statute of limitations on Debt by The Balance.

Learn how to use the statute of limitations to improve credit scores in your community and build a business around changing lives.

how to start a profitable credit repair business