The statute of limitations precludes a plaintiff from filing a lawsuit after a period of time has elapsed from the date of his cause of action. Virginia, like other states, has limitations periods for various causes of action, such as negligence, fraud and actions to recover debt based on a personal loan.
Virgina Statute of Limitations
As of the date of this article's publication, Virginia has two relevant statute of limitations periods for personal loans. If the loan contract was in writing, the Code of Virginia Procedure 8.01-246(2), which provides for a five-year limitations period, applies. If the obligation to repay the loan was based on an unwritten agreement, 8.01-246(4), which provides a three-year limitations period, applies.
Starting the Statute of Limitations Clock
The statute of limitations clock begins on the date of the cause of action. This date is the date on which the borrower defaulted on his loan obligation as determined by the terms and conditions of the loan agreement. The limitations period ends on the date the creditor files a breach of contract action in court.
Procedures
A borrower who wishes to raise the statute of limitations as a defense must do so by citing the statute of limitations in his answer to creditor complaints after they are filed in court. The borrower can request that the court dismiss the action because it is being filed outside the applicable limitations period.
Effects
The statute of limitations acts as an absolute bar to bringing another lawsuit against the debtor for repayment of the loan that was the basis for the original lawsuit. A creditor whose complaint is dismissed for failing to comply with the statute of limitations has no further legal recourse against the borrower.
Considerations
A personal loan based on an informal unwritten agreement poses enforcement problems to the creditor as well as to a borrower who might wish to raise the statute of limitations as a defense to repayment. The difficulty lies in determining the conditions and terms of the loan and the date from which the statue of limitations begins.
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