Statute of Limitations on Outstanding Bills in Wisconsin

No matter how long a bill is outstanding, it does not automatically expire; however, the creditor may lose his right to file a lawsuit to collect the bill. Each state has its own laws regarding the deadline to file a lawsuit on a debt, called the statute of limitations. In Wisconsin, a creditor generally has six years to sue on an outstanding bill.

Six-Year Statute

Bills can arise in a number of ways, such as contracts and credit transactions. Wisconsin Statute 893.43 requires a lawsuit based on any "contract, obligation or liability, express or implied...shall be commenced within 6 years" after the claim arises. For claims based on written or oral contracts, the limitation period begins on the date a scheduled payment is due and not paid. The statute of limitations on a credit card bill begins on the last account activity date.

Exception

An exception to the six-year statute of limitations is made for court judgments. If a creditor files a lawsuit to collect an outstanding bill and prevails in the lawsuit, the court will make a judgment for the amount of the bill plus any other amounts allowed by law, such as interest and court costs. In this situation, the statute of limitations on the bill is restarted and lengthened to 20 years. Within that time, the creditor can use further court process, such as a levy on a bank account, to collect.

Statute Defense

When the statute of limitations expires on an outstanding bill, a creditor or collection agency may still file a lawsuit to collect the bill. Because the expiration of the statute does not automatically preclude such action, the debtor must respond to the lawsuit and assert the defense in court to receive the benefit of the statute. If the debtor neglects to raise the defense in court, the defense is waived and a judgment can be made on the outstanding bill, thereby restarting the statute of limitations under the 20-year period for enforcing judgments.

Collecting Expired Debt

A creditor or debt collector can attempt to collect an outstanding bill, despite the expiration of the statute of limitations. Although the debtor has a good defense against a lawsuit on the bill, the debtor cannot prohibit the creditor from reporting the debt to a credit reporting agency or from engaging in other permissible non-court collection activity, such as phone calling or letter writing. A debtor must be careful when communicating with a creditor or debt collector in this situation so as not to revive the statute of limitations by acknowledging the validity of the debt or even making a small payment on the debts. Such actions can restart the six-year statute of limitations.