California Statute of Limitations on Debt Collection

A breach of contract is a common claim in lawsuits where a creditor, debt buyer, or collector files. Each time a consumer takes on debt, the consumer is making a contract to pay the debt in exchange for the credit received to make purchases. In a contract case, the statute of limitation begins to run when the contract is said to be “breached” or broken. If the consumer isn’t paying off the debt, the contract is breached. States may differ on when this breach is said to technically occur. Typically, the ultimate breach is said to occur not after one or two payments are missed, but when the account is charged off (180 days delinquent). An account is charged off after being 180 days delinquent. Thus, if being sued for breach of contract, and you want to know if the statute of limitations is a defense for you, figure out when the last payment was made, count out 180 days from then. The statute of limitations is the time the company suing has to file the lawsuit from the date of that breach.

Written agreements: 4 years, calculated from the date of breach.

Oral agreements: 2 years.

The statute of limitation is stopped only if the debtor makes a payment on the account after the expiration of the applicable limitations period.

Any other questions concerning California statute of limitations can be addressed by SmithMarco, P.C. here or at 888-822-1777.

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