Colorado Statute of Limitations on Collections

Collecting a debt can involve a variety of activities, the most serious of which is using the court system to enforce payment of the debt. The first step in using the court system is filing a lawsuit. In Colorado, the viability of a debt collection lawsuit can depend on whether the creditor filed the lawsuit before the statute of limitations expired on the debt. Determining when a debt is expired is subject to several factors, including the basis for the debt and where the debt was incurred.

Liquidated and Determinable Debts

The general statute of limitations affecting debt collection cases in Colorado is the six-year limitation period set forth in Colorado Revised Statute 13-80-103.5. This statute applies to "liquidated debt or an unliquidated, determinable amount of money due" to the creditor filing the lawsuit. For example, debts based on a promissory note, credit card account or an installment payment agreement is subject to this statute because the amount of the debt can be determined by a simple calculation.

Contracts

For debts based on contracts, whether written or oral, a three-year limitation period applies as set forth in Colorado Revised Statute 13-80-101. However, if the debt based on contract is liquidated or capable of being determined through a simple calculation, the six-year statute applies rather than the three-year statute. For example, even though a debt is the result of a credit card or charge card account established by a written agreement, the debtor cannot use this three-year statute as a defense to a creditor's lawsuit.

Promise to Pay Expired Debt

The expiration of the statute of limitations on a debt does not mean the debt is extinguished, only that the creditor's right to enforce it through a lawsuit is lost. The creditor may continue to use reasonable activities to collect the debt, such as calling or writing to the debtor requesting payment. The creditor may attempt to solicit a promise from the debtor to make a payment on the debt or otherwise acknowledge that it is owed. Under Colorado Revised Statute 13-80-113, such a promise will have no effect on the statute of limitations --- unless it is in writing signed by the debtor. In that situation, the statute of limitations will begin again on the debt from the date of the written promise.

Debts From Other States

Colorado Revised Statute 13-80-110 adds an interesting element to determining the statute of limitations on a debt when the debt was originally incurred in a state other than Colorado. Under this statute, even though the debtor resides in Colorado, the debt cannot be enforced if it has expired under the statute of limitations in the state where the debt was incurred. For example, credit card debt is subject to a three-year statute in Delaware and four-year statute in California (see Resources). Debtors from those states moving to Colorado can raise the shorter time periods under those state laws as a defense if the creditor sues on the debt in Colorado.