Time Frame to Collect on a Debt

The average American carries at least four credit cards and has an average credit card debt of $5,100 as of 2010, says Hoffman, Brinker and Roberts. They report that Generation Y individuals -- those between age 20 and 29 -- are cashing out their 401k plans, are less likely to have health coverage than previous generations and aren't building cash savings. With debt showing no signs of alleviating, consumers often need to know the time limit creditors have for debt collection.

State Variations

As of 2010, there is no national statute of limitations for debt collection. Instead, every state has their own statute of limitations. This means that the same debt amount and type can have different time limits for collection depending on where you live.

Guidelines by Agreement Type

Debt usually occurs under four main types of agreements. These include oral contracts, written contracts, promissory notes and open-ended agreements. The time frame for collecting each of these debt types varies. Oral contracts have a limit of three to 10 years as of 2010, depending on the state, according to the BCS Alliance website. Written contracts, open-ended agreements and promissory notes all have limits between three to 15 years.

Beginning and End of Statute

The statute of limitation on any debt begins when you do something contrary to the terms of your agreement. In most cases, this is failure to make one or more payments. To figure out when the statute ends, you have to figure out when your breach occurred and then add the number of years your state allows for the debt type. Some agreements have acceleration clauses, which basically mean that the statute doesn't start until the creditor sends you a notice of default and you do not rectify the problems with your account as indicated in the letter. In this case, you may have a little more time, because the statute would be calculated based on your failure to respond to the creditor's notice, not based on your original breach.

Unnecessary Payments

Once the statute of limitations on a debt expires, your creditor legally is no longer entitled to collect the debt. You have the right to use the statute of limitations as a defense against payment. However, many consumers do not realize this. As a result, when creditors ask for payments after the statute of limitations has expired, they pay out money which they truly no longer owe. Additionally, creditors will not always continue to pursue debts through the statute of limitations. This is because the cost of pursuing the debt eventually outweighs the debt itself.