The Statute of Limitations on Repossession

A statute of limitations (SoL) is a law that sets a maximum period of time for which a claim or action can be filed in a court of law. These periods are set by, and vary by state and type of legal action.

Because a contract is signed, vehicle purchases fall under the written contract clause of each state’s statute of limitations.

The statute of limitations becomes effective on the date of the last activity on an account. In most cases, this means on the date of the last payment made. However, entering an additional agreement, either written or verbal, with the debt holder will reset the statute of limitations.

Once the statute of limitations expires, debt collectors can no longer file a lawsuit against you in an attempt to collect on the debt. This does not mean you do not still owe the debt, it simply means that debt collectors have no legal means to force your repayment of the debt.

Each state has established its own time limit on SoLs, with the average being six years. Kentucky and Ohio have the longest limit at 15 years, while North Carolina and South Carolina have the shortest at only three years.