New Jersey Statute of Limitations on Enforcing a Debt

Creditors and debt collectors are on a deadline if they intend to use the civil courts to enforce a debt; the deadline is also called the statute of limitations. In New Jersey, the limitations period for suing on a debt is generally six years. Also, the statute of limitations only affects the right to file a lawsuit, not out-of-court collection activity.

Six-Year Statute

Debts are usually incurred through contracts, written or unwritten, or open-ended accounts such as credit card accounts. New Jersey Permanent Statute 2A:14-1 states that "recovery upon a contractual claim or liability, express or implied, or upon an account" must be filed within six years. The statute of limitations on the debt starts from the date the debtor is delinquent in making a required payment, such as a scheduled payment on an installment contract. In the case of a credit card account, the limitations period starts on the date of the last account activity, either a payment or a purchase.

Exception

The six-year statute of limitations does not apply to contracts between merchants or a sale of goods under New Jersey's commercial code. The limitation period for such actions is four years, as specified in subsection 1 of New Jersey Permanent Statute 12A:2-725. This statute also permits the parties to alter the limitations period in their original contract by reducing the time period to as short as one year; however, the time period cannot be extended.

Debt Collection

Once the statute of limitations expires on a debt, a lawsuit filed by a creditor or debt collector to enforce the debt can easily be defeated by the debtor. In response to the lawsuit, the debtor asserts the statute and the court dismisses the lawsuit. However, this does not extinguish the debt or prohibit the creditor or debt collector from attempting to collect it by other means, such as contacting the debtor, reporting the debt to a credit reporting agency or obtaining the debtor's consumer report.

Judgments

A court judgment obtained by a creditor or debt collector effectively restarts the statute of limitations. New Jersey Permanent Statute 2A:14-5 allows a judgment to be pursued for a period of 20 years. Also, within those 20 years, the judgment creditor may apply to the court for an extension of the limitation period for another 20 years.