Ask Bill your personal finance question

Statutes of Limitation Conflict

How do I know which statute of limitations to use if my creditor is in Montana and I reside in Idaho?

I've been digging through the questions and have found many related to my personal situation but nothing quite matched. I acquired 2 medical bills in Montana 7 1/2 years ago. I now live in Idaho and have been contacted by a collection agency in Idaho. My first question is whether medical bills are considered written contracts? My second question is whether the collection agency has to use SoL from Idaho or can they choose to use Montana's SoL (which is 8 years)? Lastly, if they can use Montana's SoL, what are my options since I cannot afford to pay it right now? Sincere thanks, Tina

Read full question
Bill's Answer
(4 Votes) | Find Learn Save

  • Medical services are performed under a written contract.
  • A written contract will often spell-out which state laws apply.
  • Statutes of limitations questions are decided by the facts of each case.

Generally speaking, medical services are performed according to a written contract, and most states consider medical debt to fall under contract law. Medical debt is also somewhat different as a class from other unsecured debt because it is sometimes performed to save a life, which raises contract issues not pertinent to your question. Some courts use the common law doctrine of necessaries to require parents to pay for the medical care of minor children and spouses to pay for each other's care. It is not fair or accurate to lump all medical debt in with other unsecured debt, which is covered by contract law. But it is not entirely wrong to think of medical debt as just another form of unsecured debt either.

Statute of Limitations

When courts must answer a question such as yours regarding which statute of limitations to apply, they will look to their own state law first and the language of the contract. If the contract spells out which statutes of limitations will apply, then generally speaking a court will use that state's laws.

The first thing an Idaho court will do is look at the plain language in the contract you signed. If the contract says you agreed to use the laws of Montana, then it is likely but not certain the Idaho court will use the Montana statute of limitations.

On the other hand, if the contract is silent on the choice of laws question, then the analysis becomes much more complicated. Many states follow the Restatement Second of Conflict of Laws, using a "significant contacts" approach when deciding a conflict of laws issue. Others will look at where the transaction or service took place and call it a day. Idaho follows the Restatement. Under section 188 of the Restatement, when the laws of two states might potentially apply, the law of the state with the most significant relationship to the contract should apply.

The most significant relationship is determined under the factors set forth in section 6 of the Restatement according to the following contacts: "(a) the place of contracting, (b) the place of negotiation of the contract, (c) the place of performance, (d) the location of the subject matter of the contract, and (e) the domicile, residence, nationality, place of incorporation, and place of business of the parties."

What does all of this mean to you? Your question about which statute of limitations applies will not result in a cut-and-dried answer. If it is written into the contract you signed with the medical service provider, that is a likely bet. If not, then which applies is a question for the court. The plaintiff will argue for what is written in the contract, and if it is unwritten then Montana law, which is 8 years because the transaction and service was provided in Montana while you were a Montana resident. You will argue for the Idaho written contract statute of limitations, which is 5 years, because you reside in Idaho, the court is in Idaho, and the plaintiff should expect Idaho rules to apply when it prays for relief in Idaho. Who will prevail on this point will depend on the persuasiveness of the arguments and the facts before the judge.

If the Montana creditor prevails in court, then the creditor may proceed and use the Idaho court to pursue you for the debt. If you prevail on the statute of limitations question, then the case will be dismissed and the creditor may not use the Idaho or Montana court to pursue a judgment against you. In that case, the debt does not disappear. The creditor may continue to ask you for the money privately, but it may not sue you and use the court system to collect it.

Debt Options

You mentioned you cannot afford the pay the debt. One option is to open negotiations with the creditor. Some people thrive in negotiations, and others do not. If you are a born negotiator, then learn the tips and techniques for negotiating debt. If you are not, then consider hiring a negotiating firm to settle the debt for you.

I hope this information helps you Find. Learn & Save.



Get Debt Help!
(4 Votes)

People also like to Read

Brad Stroh

Debt Relief Options | Compare which debt relief option is best between Consumer Credit Counseling Services and Debt Settlemen... Read more >>

Brad Stroh

9 do-it-yourself debt solutions, including how to stop a collector's calls, validate debt, dispute an error in your credit re... Read more >>

Mark Cappel

Get Out of Debt Free | The lowest-cost method of getting out of debt for free is bankruptcy. You have other options, too, and... Read more >>

Daniel Cohen

Review your debt consolidation options. Find the right way to pay off your debt. Pay attention to debt consolidation reviews ... Read more >>

Mark Cappel

Learn about credit cards. Find low interest credit cards. Understand how to use credit cards to boost your credit. Make sure ... Read more >>


1500 characters remaining