Statute of Limitations on a Civil Debt in Nevada

Nevada law specifies a statute of limitations on a civil debt. The purpose of the statute is to ensure that creditors file a lawsuit to enforce a debt in a reasonable time. The length of the statute of limitation for a particular debt depends on how the debt was incurred. If the creditor fails to file a lawsuit on an unpaid debt before the statute expires, the debtor can use the statute to defend against any subsequently filed lawsuit.

Contracts and Open Accounts

The Nevada statute of limitations for most types of civil debts is set forth in Nevada Revised Statute 11.190. For debts based on a written contract, the deadline for a creditor to file a lawsuit is six years from the date of breach---typically when a specified payment is not made. A shorter limitation period of four years applies to debts based on oral contracts. For open account debts, such as credit cards, the limitation period is also four years.

Foreclosure

A special statute of limitations applies to debts arising out of a foreclosure of a mortgage or deed of trust. If the foreclosure sale price is less than the balance due on the mortgage, a lender pursues a judgment against the debtor for the balance, commonly called a deficiency judgment. Pursuant to Nevada Revised Statute 40.455, the lender has only six months after the foreclosure sale to file a lawsuit for a deficiency judgment.

Judgments

In addition to the statute of limitations on filing a lawsuit to enforce a debt, a statute of limitations also applies to enforcing a judgment obtained in a debt collection lawsuit. Nevada Revise Statute 11.190(1)(a) gives a judgment creditor six years to use the court process to enforce the judgment, such as garnishing wages or levying on a bank account. As a practical matter, obtaining a judgment resets the statute of limitations on the debt.

Asserting the Statute of Limitations

The expiration of the statute of limitations on a particular debt does not automatically extinguish the debt. A creditor can still file a lawsuit on the debt to obtain a court judgment. If the debtor fails to respond to the lawsuit, a judgment can be made on the expired debt because the debtor will have effectively waived the statute of limitations defense. A debtor must raise the defense in court in order to defeat the creditor's lawsuit.