The Statute of Limitations on Arkansas Debt

A creditor has the right to enforce a debt through the court, but only for a limited time. In Arkansas, as in all states, the law specifies a statute of limitations on enforcement actions, which will vary depending on the type of debt being enforced. Arkansas law generally gives a creditor three or five years to sue a debtor and, after a judgment is made on the debt, 10 years to collect it. If the creditor fails to adhere to the deadlines, the creditor is barred from using the court process to enforce the debt.

Written Obligations

As a rule, the Arkansas statute of limitations for any debt based on a writing is five years. Arkansas Code Section 16-56-111(a) states that "actions to enforce written obligations, duties, or rights" shall be commenced five years "after the cause of action accrues." This means that if a debtor defaults on an installment agreement, the creditor has five years from the date a payment was first missed to file a lawsuit to enforce the agreement. A specific exception is made in this code section for written obligations subject to Arkansas Code Section 4-4-111 which pertains to bank deposits and collections. Debts arising in this context are subject to a three year statute of limitations.

Credit Card Debt

For debts not based on a written obligation, Arkansas law provides a three-year statute of limitations. Arkansas Code Section 16-56-105 states that all "actions founded upon any contract, obligation, or liability not under seal and not in writing" shall be commenced without three years "after the cause action accrues." This limitation period applies to debts based on oral contracts and open accounts where there are a series of debits and credits over time. Whether a debt based on a credit card account is an open account is not a settled issue under Arkansas law as of March 2011. Some courts have agreed it is an open account and applied the three-year statute, which benefits the debtor, while other courts have applied the five-year statute, which benefits creditors. Until the law is settled, a debtor should assert the three-year statute of limitations in defending against a lawsuit based on a credit card debt.

Judgments

Creditors who obtain court judgments on a debt in Arkansas benefit from a new statute of limitations applying to enforcement of the judgment. Arkansas Code Section 16-56-114 gives a judgment creditor 10 years to collect the judgment using court process, such as a wage garnishment, if the judgment is not voluntarily paid. If all or part of the judgment has not been collected within 10 years, no further action can be taken to enforce the judgment.

Affecting the Statute

A debtor can lose the benefit of the statute of limitations if, after the statute has expired on an old debt, the debtor makes a partial payment -- regardless of how small -- or acknowledges the debt in writing. This situation typically occurs when a debt collector contacts the debtor about the old debt and the debtor makes a small payment or acknowledgment to stop further contact from the debt collector. In 2010, news reports from Arkansas indicated such debt collector tactics were on the rise and, in July 2010, the Arkansas attorney general issued a press release alerting Arkansans to be vigilant and know their rights when communicating with debt collectors (see Resources).