Thu Aug 21 2014   

Bankruptcy Law Research Guide:
Statutes of Limitation

Statutes of limitation

State law limits the amount of time a creditor has to sue to collect a debt or enforce a money judgment. Once the time has passed, a creditor has no further collection remedy available.

Sometimes a creditor will make a last effort to collect a debt before the limitations period expires. This explains why a debtor is sometimes contacted by a creditor who appeared to give up collection efforts years ago.

These laws differ from state to state so it is important to determine the applicable state law.

How do I determine which state’s statute of limitation apply to my debt?

Unless a contract or agreement was both signed and performed all in one state, determining which state law applies to a particular debt can be complicated. To make the determination, some courts focus on the place where the contract was entered into or performed, but the modern trend is to apply the law of the state that has the most significant relationship to the transaction and the parties. Restatement (Second) of Conflict of Laws § 188(1).

Often, contracts or loan agreements contain forum selection or “choice of laws” clauses. These clauses state that the parties to the contract agree to allow the contract to be governed by the law of a particular state, and agree to enforce the contract only in the courts of that state. Courts generally enforce these agreements unless they are unfair or unreasonable.

What are the statutes of limitation to sue to collect a debt in Arizona?

There is a six year statute of limitation to sue on a contract in writing (A.R.S. § 12-548) and a three year limitation period for an oral debt or stated or open account (A.R.S. § 12-543).

What is the statute of limitation on enforcing a judgment in Arizona?

After a creditor has successfully sued and obtained a judgment, the creditor has five years from the entry of judgment to enforce it (A.R.S. § 12-1551(B)) unless the judgment is renewed. A judgment may be renewed by filing an action to enforce the judgment (A.R.S. § 12-1611) or by filing an affidavit with the court within ninety days before the expiration of the five year period (A.R.S. § 12-1612).

Page Updated:  5 November 2008