Although a collection agency can purchase and pursue your unpaid debt, it doesn’t reserve the right to pursue you through the court system indefinitely. A collection agency can only legally file a lawsuit against you and seek a judgment if your state’s statute of limitations remains in place.
Collection Lawsuit Statute of Limitations
The statute of limitations for collection lawsuits differs in each state. Most state’s statute of limitations lie somewhere between the three to six year mark, but some states, such as Wyoming and Rhode Island, entertain longer statutes.
During the statute’s active period, any creditor to whom you owe a bad debt has the right to file a lawsuit against you and force you to repay your debt through the court system. Should the plaintiff win the lawsuit, the court grants it a judgment. Judgment enforcement periods are typically much longer than the statute of limitations for lawsuits and can be renewed in most states.
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