Definition
The statute of limitations on debt is the period set by state law during which a creditor or collector may file a lawsuit to collect. It typically runs three to six years from the last payment or default, varying by state and by whether the debt is based on a written contract, oral agreement, promissory note, or open account. When the period expires the debt is time-barred: it is still owed, but it cannot be enforced in court.
Collecting time-barred debt is lawful in most states but heavily regulated. Suing or threatening to sue on it is an FDCPA violation. Several states require specific disclosures when collecting it, and some prohibit collection entirely. In many states, a partial payment or written acknowledgment can revive the statute, restarting the clock, which is why disclosure matters.
Example
A $900 retail card debt in Texas (4-year statute) last paid in 2021 becomes time-barred in 2025. A collector may still request payment, with the required disclosure that it cannot sue, but may not threaten litigation or report the debt once it is also past the 7-year credit reporting limit.
How HL Hunt handles it
HL Hunt calculates the statute per account using state, debt type, and last-activity date, flags time-barred accounts, inserts required state disclosures automatically, blocks litigation language and legal referral, and in states that prohibit collection, suppresses outreach entirely.