As simple as the idea sounds at first, New York’s statute of limitations on debt can be tricky. Even knowing how long it runs depends on details like the type of debt and the state where the debt originated.

It can all leave you wondering why there is even a statute of limitations on debt. Some answers to this question are more direct than others.

What is New York’s debt statute of limitations?

Most consumer debt is beyond the reach of lawsuits after six years, as are debts from a signed and sealed contract and debts arising from a mistake or fraud, among others. Debts from a store credit card cannot go to court after four years. Those arising from alimony and child support, mortgages, rent overcharges, damages for non-medical malpractice and other debts have varying statutes limitations.

The clock typically starts ticking about 30 days after the debtor stops paying on the debt. So, consumer who finally makes another payment after five years and 11 months may only reset the clock.

For debts issued by a bank in another state, that state’s statute of limitations probably applies. Many states have shorter limitations than New York.

Why is there a statute of limitations on debt?

The idea is old. The Bible’s Book of Deuteronomy (15:1-2) appears to set a seven-year limit on the time a person should demand repayment of a debt.

Maybe more practically, facts thin out as time goes on. Witnesses get harder to find, they forget, or they die. Data gets lost and papers burn or shred.

People forget. If someone said you owe them $60 from 20 years ago, could you remember if it were false? Without a statute of limitations, old debt can become an effective fraud scheme.

Finally, it helps people and businesses when their books show useful and realistic debts and assets. Forgiving debt can be good for business.

Lawsuits have time limits, but debts do not

The statute of limitations does not make the debtor’s debt disappear. They still owe it. The statute of limitations also does not keep the creditor from asking for the money.

What vanishes when the statute of limitations runs out is the creditor’s ability to file a lawsuit against the debtor to get their money.

Also, when the statute runs out, the creditor has new rules. For example, they cannot threaten to file a lawsuit after their chance to sue has run out.