NSW Legislation

A statute of limitation is the amount of time a person can take legal action on a certain event. When it comes to debt, the statute of limitation is the amount of time a creditor can ask the court to force you to pay for a debt. The court system doesn't keep track of the statute on your debt. Instead, it's your responsibility to prove the debt has passed it's statute of limitation.

Debts fall into one of four categories. It's important to know which type of debt you have because the time limits are different for each type. Ask an attorney if you have questions about which type of debt you have.

Each state has its own statute of limitations on debt: the amount of time the court will force you to pay a debt. The statute of limitations varies depending on the type of debt you have - credit card or loan - and is usually between three and six years, but is as high as 10 or 15 years in some states. Before you respond to a debt collection, find out the debt statute of limitations for your state

If the statute of limitations has passed, there may be less incentive for you to pay the debt. If the credit reporting time limit (a date independent of the statute of limitations) has also passed, you may be even less inclined to pay the debt.