Printed on: January 27, 2013


Statute of limitations on debt

Michael G. Whittaker

Question: A friend borrowed $20,000 in 1995 promising to pay it back by 2005. Together we wrote up and signed a contract. Throughout the years he has made a few payments. In 2008, he moved back East for four years and I could not locate him. He recently moved back, and when I reminded him about the debt, he said he did not owe me anything because of the "statute of limitations." Is this true?

Answer: In civil litigation, the statute of limitations is the ultimate defense. The statute of limitations is the time period within which civil lawsuits can be filed. Failure to file your lawsuit within this period of time means you lose. The length of that period depends on the legal status of the parties involved and the circumstances causing the aggrieved party to file the lawsuit. The statute of limitations can be reset or paused as discussed below.

The statute of limitations for a lawsuit resulting from a written contract is five years. The clock begins to tick as soon as one party to the contract fails to do what they agreed to do.

To prevent the statute of limitations from becoming the other party's ultimate defense, a complaint must be filed before the statute of limitations expires. In a lawsuit over a debt, the statute of limitations is reset when the debtor acknowledges he owes the debt by making a payment. The statute of limitations resets and the five-year clock begins to tick again from the date of the payment. The statute of limitations pauses while a debtor lives out of state.

You had the right to sue your "friend" for any unpaid amount Jan. 1, 2005. On that date, the statute of limitations clock began to tick. It expired Jan. 1, 2010, unless:(1) before that date, you filed a complaint demanding payment, (2) it was reset by receipt of a payment (and then it began ticking again from the payment date), or (3) it was paused while the debtor lived out of state. If your friend has not made a payment since Jan. 1, 2005, then the statute of limitations has not been reset. However, the statute of limitations paused while your friend lived back East. Because your friend lived back East for four years, that time is added to the five-year statute of limitations. You now have until Jan. 1, 2014, (five-year statute of limitations, plus 4 additional years while the friend lived out of state) to file a complaint before your friend's statement becomes a reality.

Michael G. Whittaker is an attorney practicing in Idaho Falls. This column is provided by the 7th District Bar Association as a public service. Submit questions to "It's the Law," P.O. Box 50130, Idaho Falls, ID 83405; or by email to farnam@hold This column is for general information. Readers with specific legal questions should consult an attorney. A lawyer referral service is provided by calling the Idaho State Bar Association in Boise at (208) 334-4500.