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Real Estate Statue of Limitations

In real estate you must begin the lawsuit within a legally prescribed time period. If you fail to initiate the lawsuit withing the time period, you may have no remedy in the courts.

Four examples for real estate:

1) Three years to bring action for removal of encroachments.

2) Four years to bring action on a written contract.

3) Five years to bring action for recovery of title to property.

4) Ninity days after filling a mechanic's lien.

Individual State of Limitation

When you are in debt and cannot pay it off, a creditor legally can collect their money from you. We all know how they do it, from letters to phone calls asking to you to pay it off. Statue of limitations gives creditors certain number of years to collect their money. If they are not able to collect that money in a certain years, legally they no longer come after you. 

Let's say that you live in Alabama and you have applied for credit card with limit of $5,000. For some reasons you are not able to repay that money on time and you fall behind your payment. Creditor starts to call you and send you letters that your account is in collection. Here is a tricky part. Creditors in this case has right to collect their money in 6 years period, as stated in our table below. After 6 years they can no longer come after you and it will take anywhere 2-5 additional years until negative collection will be removed from your credit report.

Ok, now about the tricky part. How does the creditor know when the 6 year period start? It is not necessarily the day you applied for your credit card. It is the day you stopped paying off your bill. But here is the tricky part. Let's say that you got a credit card in January 2000, than in April 2000 you stopped paying your credit card. You are in default, and this is the start of 6 years period for creditor. Now let's say that in January 2001 you make a payment, thinking you would like to pay it off. Well, the 6-year period is erased and starts again when you default. This process is called "restarting a clock" as called by most creditors.

Once you default on a credit card make sure you fully understand statue of limitations. Our table below shows limitations for each state.

Statue of Limitation Table:

Oral Contract - You agree to pay money loaned to you by someone, but this contract or agreement is verbal; i.e. no written contract. Remember, a verbal contract is legal.

Written Contract - You agree to pay on a loan under terms written in a document, which you and your debtor have signed.

Promissory Note - You have agreed to pay on a loan via a written contract, just like the written contract. The big difference between a promissory note and a regular written contract is that the payments are scheduled and interest on the loan is also spelled out in the promissory note. An example of a promissory note is a mortgage.

Open Ended Accounts - These are revolving lines of credit with varying balances. The best example is a credit card account

State
Oral
Agreements
Written
Contracts
Promissory
Notes
Open
Accounts
Alabama
6
6
6
3
Alaska
6
6
6
6
Arizona
3
6
5
3
Arkansas
3
5
6
3
California
2
4
4
4
Colorado
6
6
6
6
Connecticut
3
6
6
6
Delaware
3
3
6
3
D.C.
3
3
3
3
Florida
4
5
5
4
Georgia
4
6
6
4
Hawaii
6
6
6
6
Idaho
4
5
10
4
Illinois
5
10
6
5
Indiana
6
10
10
6
Iowa
5
10
5
5
Kansas
3
5
5
3
Kentucky
5
15
15
5
Louisiana
10
10
10
3
Maine
6
6
6
6
Maryland
3
3
6
3
Massachusetts
6
6
6
6
Michigan
6
6
6
6
Minnesota
6
6
6
6
Mississippi
3
3
3
3
Missouri
5
10
10
5
Montana
5
8
8
5
Nebraska
4
5
6
4
Nevada
4
6
3
4
New Hampshire
3
3
6
3
New Jersey
6
6
6
6
New Mexico
4
6
6
4
New York
6
6
6
6
North Carolina
3
3
5
3
North Dakota
6
6
6
6
Ohio
6
15
15
-
Oklahoma
3
5
5
3
Oregon
6
6
6
6
Pennsylvania
4
6
4
6
Rhode Island
15
15
10
10
South Carolina
10
10
3
3
South Dakota
6
6
6
6
Tennessee
6
6
6
6
Texas
4
4
4
4
Utah
4
6
6
4
Vermont
6
6
5
6
Virginia
3
5
6
3
Washington
3
6
6
3
West Virginia
5
10
6
5
Wisconsin
6
6
10
6
Wyoming
8
10
10
8