Statute of Limitations for Debt in California

California laws create a statute of limitations on consumer debt by placing a time frame on how long creditors have to file a lawsuit against alleged debtors. One purpose of the statute of limitations is to prevent creditors from bogging down the court system with extremely old cases. It also prevents debtors from a surprising lawsuit when they thought a debt was over with years before.

Types

Some alleged debts are verbal agreements between you and an individual or company that provides a product or services, such as hiring a maid service or repair man. Agreements with credit card companies, mortgage holders and other loans or promissory notes are written contracts and subject to a different statute of limitations than verbal agreements.

Time Frame

The statute of limitations for verbal agreements for payment is two years in California. Written contracts, which include arrangements with a person or company that provides you with a statement or invoice for the amount due, are subject to a statute of limitations of four years in California.

Commencement

The statute of limitations for a verbal agreement commences on the date of completion for the service the creditor provided, or on the due date for payment on a product the creditor supplied. The statute of limitations for a written contract in California commences on the date of the last invoice/statement sent to you in which the creditor claims you made no subsequent payment.

Exceptions

The court may find that there are exceptions to the commencement of the statute of limitations. For example, if you are in prison when the statute of limitations would normally begin, the court may determine that you were unable to make payments on the debt at that time and rule that the statute of limitations did not begin until you your release from jail.

Judgment

If a creditor seeks a judgment against you in court to collect on the debt you allegedly owe through wage garnishment or bank account, it has to show that the statute of limitations has not expired. You must provide documentation that shows the true date the statute of limitations commenced was earlier than the creditor reported, or that you paid the debt in full and the creditor did not apply your payment.