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Restart Statute of Limitations

Restart Statute of Limitations

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Mark Cappel
UpdatedJul 15, 2024
Key Takeaways:
  • The statute of limitations for debt varies from state to state.
  • Which statute of limitations applies to your debt might be tricky to determine.
  • Generally, courts like to use their own statute of limitations rules.

Will I Restart the Statute of Limitations On My Debt If I Move to Another State?

Some statute of limitations questions are tough to answer. This is one of them.

Will you restart the statute of limitations on debt if you move from one state to another? The short answer is, "You will probably not restart a statute of limitations if you change your state of residence."

The long answer is more complicated, and much depends on your circumstances.

Pause & Restart Statute of Limitations

The statute of limitations for debt varies from state to state, and by type of debt. The statute of limitations for debt usually starts at the moment of breach. This means most courts start the statute of limitations clock when you miss your payment. Once started, the statute of limitations clock runs for as long as you:

  • Do not make a payment voluntarily
  • Do not make a written promise to make a payment
  • Remain available to receive a service of process

Voluntary Payment: Making a voluntary payment, even a couple of dollars, restarts the statute of limitations clock. Clever collection agents try to convince consumers to make a $10 or $20 payment as a "Sign of good faith." All this payment does is buy the collection agent and its lawyer more time to collect the debt and, if they are aggressive, file a lawsuit against you. You may want to pay an old debt, but don’t make a payment "as a sign of good faith."

Acknowledge Debt: A written promise to pay a debt will reset the statute of limitations in most states. A promise to pay an old debt is called an "acknowledgment." Most states require the acknowledgement to be in writing. Be careful when negotiating a debt settlement that you do not accidentally tell the other side you acknowledge the debt.

Are Available: The law in most states requires you be available for service of process. A service of process is the formal legal process by which you are presented with the notice of a lawsuit. "Available" means different things in different states. Most states agree if you leave US soil you’re unavailable to receive service of process. Some states say you’re unavailable when you leave the state.

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The statute of limitations clock pauses when you’re unavailable for service of process. This pause is called "tolling" by lawyers. Each state has its own statute of limitations tolling rules.

Tolling is pretty simple. Let’s say your debt's statute of limitations is 4 years. In the middle of that 4-year stretch, you move to Italy for 6 months and the other side knows you were out of the country that length of time. The tolling rule causes your debt’s statute of limitations to become, in effect, 4 years 6 months.

Statute of Limitations & Changing States

As mentioned, each state has its own statute of limitations rules. The statute of limitations for the state you resided in when debt occurred may be 4 years, and your new state of residence uses a 10-year rule. Which applies? This is one of the tricky parts of your question.

Generally, courts like to use their state’s rules. Courts must use another state’s statute of limitations rule when justice requires it. However, judges usually bend over backwards to use their home state’s rules because these are the rules they and the lawyers involved understand.

A party filing a lawsuit must do so in a court that has jurisdiction over everyone involved. Here’s where we get into the heart of your question. Which court has jurisdiction over this case: A court where you lived before? Or, a court where you live now? What if the contract says everyone agrees to a different court? Where the case is tried usually, but not always, determines which statute of limitations rule applies.

Generally, courts first look to the contract to see if there’s a choice of laws clause. A choice of laws clause says something like, "The creditor may be based in New York, and you the consumer may live in California, but if there’s ever a dispute about this contract, we agree to fight this out using Illinois rules in an Illinois court."

Your first task is to dig out your contract with the creditor to see if it contains a choice of laws clause. Both parties can waive a choice of laws clause. Or, one party can argue the choice of laws clause is unjust, and ask the court to dismiss the case. However, the US Supreme Court has found choice of laws clauses as Constitutional, so if you’re sued in an out-of-state court, you may have to defend yourself there.

Our analysis does not stop here. What if there is no choice of laws clause in the contract? State laws vary, but the usual rule is the party bringing the lawsuit can do so in the state where the damages occurred. This tips the answer to your question to a court in the state where you lived.

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We can’t stop the analysis here, either. If the party bringing the lawsuit is a collection agent, then special federal rules apply to collection agent lawsuits. These rules are found in the Fair Debt Collection Practices Act. Under the FDCPA, a collection agent must file a lawsuit against a consumer in either the state where the contract was signed, or where the consumer now resides.

This means that if a collection agent sues you, it must do so either in your old state (if you signed the contract there) or your new state of residence. Original creditors usually do not need to follow this rule.

Statute of Limitations: Your Next Step

If you receive notice of a lawsuit, consult with a lawyer in your state immediately. Never ignore a lawsuit. You might be able to defeat a lawsuit easily by raising the statute of limitations, filing a motion to dismiss based on incorrect venue, a defect in the complaint, or another defense.

Most consumers lose debt-related lawsuits by default. Many of these consumers could have defeated these lawsuits by filing a statute of limitations or other defense. Unscrupulous collection agents bank on consumers taking no action to defend themselves, and walk away with judgments that allow them to garnish wages, levy bank accounts, place liens on property, and ask local sheriffs to seize their personal property.

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



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Struggling with debt?

If you are struggling with debt, you are not alone. According to the NY Federal Reserve total household debt as of Quarter Q1 2024 was $17.69 trillion. Student loan debt was $1.60 trillion and credit card debt was $1.12 trillion.

According to data gathered by from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 10% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.

The amount of debt and debt in collections vary by state. For example, in Arkansas, 35% have any kind of debt in collections and the median debt in collections is $1553. Medical debt is common and 18% have that in collections. The median medical debt in collections is $561.

Avoiding collections isn’t always possible. A sudden loss of employment, death in the family, or sickness can lead to financial hardship. Fortunately, there are many ways to deal with debt including an aggressive payment plan, debt consolidation loan, or a negotiated settlement.



JJohn, Feb, 2021

Important example to be discussed: What if I cause the debt in a state with a long SOL, like 5-10 years, then move to a state with a 3 year limit, thereby instantly ending the long SOL. By the sounds of it, most cases would us the SOL of the state in which the court proceeding occurred (the new state with shorter SOL).

JJose Va, Mar, 2014
what do i do if i don't have the original credit card bill or statement to prove when the statute of limitations began?
BBill, Mar, 2014
Use the best information you can find. Start by seeing what appears on your credit report. If the account doesn't show, then consult with a lawyer who has civil litigation experience in your state to learn exactly what your local courts require in the way of proof.
JJose V., Feb, 2014
If the statute of limitations is the same for New York and Massachusetts, why does it matter which state I reside in?
BBill, Feb, 2014
From a high level, New York and Massachusetts have the same rule for breach of contract. However, lawyers and judges will find differences in each state's rules.

Statutes of limitations rules vary from state to state for two reasons. First, they were written at different times by different state legislatures. Second, each state court system interprets state laws differently.

On the surface, New York and Massachusetts share 6-year statute of limitations for breach of contract. But there are almost certainly differences in how New York and Massachusetts courts interpret these rules. For example: 1. When, exactly, do the statute of limitations clocks start in each state? 2. What are the tolling rules for each state? 3. How does each state court interpret choice of laws clauses? 4. What does each state court consider sufficient proof for SOL-related issues, like tolling?

This is a frustrating subject because it seems like writing a rule for when a statute of limitations clock runs out is a simple task. However, once 50 independent state legislatures, the federal legislature, and 51 independent court systems get involved in anything, we see a variety of rules and interpretations.

If you have a situation where you're on the borderline for your statute of limitations clock running out, consult with a lawyer who has civil litigation experience in both Massachusetts and New York to learn if your state of residency matters when asserting a statute of limitations defense.

JJose V., Jan, 2014
If I move to another state, how would I file for bankruptcy?
BBill, Jan, 2014
Consult with a bankruptcy lawyer if you consider filing bankruptcy. Most pro per (home-made) bankruptcy filings fail. Almost all lawyer-filed bankruptcy filings succeed. Why do pro per filing fail? No one knows for certain, but my guess is people untrained in bankruptcy law screw-up their filings, which the courts reject.

You can file for a bankruptcy at any time. However, the bankruptcy court will look at where you, your assets, and liabilities have resided for the last 180 days determine which bankruptcy exemptions apply.

If you believe bankruptcy is a certainty, talk to a bankruptcy lawyer as soon as possible so that you can understand the 180-day and other rules relevant to your situation. A bankruptcy lawyer is not allowed to help you plan a bankruptcy, but is allowed to explain your options.
JJose V., Jan, 2014
If the statute of limitations has passed, does it matter if I plan on moving to another state?
BBill, Jan, 2014
Moving to another state matters. When you change your residency to a new state, you become subject to the new state's rules. You cannot pick and choose which rules apply to you.

There is no rule I know of that reads, "If the statute of limitations clock on my debt runs out, and then I move to a state with a longer statute of limitations, the new state must honor my old state's SOL clock expiration."

As stated in the original answer above, there may be times when you can argue that, for the interest of justice, another state's statute of limitations rule applies. But do not count on a court agreeing with this argument.