statute of limitations ohio for debt collection

If you're dealing with debt collection in Ohio, here's what you need to know:

• Timeframe: Most consumer debts in Ohio have a 6-year statute of limitations. This includes written contracts, oral agreements, credit cards, and promissory notes.
• When the clock starts: The countdown begins 30 days after the last payment, charge, or default date.
• Exceptions: Ohio's borrowing statute applies if the debt originated in a state with a shorter statute of limitations (e.g., Delaware’s 3-year limit for credit card debt).
• Court judgments: Valid for 5 years but can be renewed.
• Federal student loans: No statute of limitations applies.
• Actions that restart the clock: Partial payments, written acknowledgment of debt, or entering a new payment agreement.
• Compliance risks: Attempting to collect on expired debts can violate the Fair Debt Collection Practices Act (FDCPA) and Ohio’s Consumer Sales Practices Act (OCSPA), leading to significant penalties.

Ohio’s laws are strict. Debt buyers and collectors must carefully track dates, ensure compliance, and avoid pursuing time-barred debts. Violations can result in lawsuits, fines, and reputational damage.

Zombie Debt: Why Old Bills Return and How to Stop Them in Michigan and Ohio

sbb-itb-23a5340

Ohio Statute of Limitations by Debt Type

Knowing how long creditors have to pursue unpaid debts is a key part of managing financial portfolios effectively.

Time Limits by Debt Category

Ohio law outlines specific timeframes for legal action on unpaid debts. After the passage of Senate Bill 13 on June 14, 2021, most consumer debts in Ohio now fall under a six-year statute of limitations.

• Written contracts: This category includes credit agreements, loan documents, and signed payment plans. These are subject to a six-year limit under Ohio Revised Code §2305.06.
• Oral agreements: These also fall under a six-year limit as per Ohio Revised Code §2305.07. However, proving oral agreements in court can be tricky without solid documentation.
• Promissory notes: Often used in business lending and commercial financing, these are also limited to six years under Ohio Revised Code §1303.16.

For open accounts, such as credit cards and revolving credit lines, the six-year rule generally applies. However, Ohio’s borrowing statute (Ohio Revised Code §2305.03(B)) can override this. For instance, if a credit card was issued by a bank in a state with a shorter statute of limitations, Ohio courts must apply that shorter timeframe. A notable example is the 2016 case Taylor Jarvis v. First Resolution Investment Corp., where the Ohio Supreme Court ruled against a debt buyer for pursuing a credit card debt originally issued by Chase Bank USA in Delaware, a state with a three-year statute of limitations.

"Where the cause of action accrued is the key element of the borrowing statute... the cause of action accrued in Delaware, which is where the debt was to be paid and where Chase suffered its loss."
– Justice Paul E. Pfeifer, Ohio Supreme Court

Court judgments have a five-year enforceability period under Ohio Revised Code §2329.07, but they can be renewed to avoid becoming dormant. Federal student loans are an exception, as they have no statute of limitations under 20 U.S.C. §1091a. These varying timeframes provide the foundation for comparing different debt types.

Quick Reference Table: Statute Periods by Debt Type

Here’s a quick summary of the statute of limitations for various debt types in Ohio:

Medical and Real Estate Debt: Special Rules

Medical debt in Ohio follows the same six-year statute of limitations as other consumer debts, under either §2305.06 or §2305.07.

For real estate-related debt, including promissory notes secured by property, the six-year limit under §1303.16 also applies.

There’s an important exception across all debt categories: the statute of limitations can be paused, or "tolled", in certain situations. For example, if the debtor is a minor, imprisoned, incapacitated, or out of state, the collection window is extended. Recognizing these tolling events is critical for proper risk evaluation when managing debt portfolios.

How the Statute of Limitations Clock Works

Knowing when the statute of limitations clock starts - and what can reset it - is crucial for managing debt portfolios effectively.

When the Clock Starts

In Ohio, the statute of limitations begins ticking 30 calendar days after the last charge or payment, whichever happens later. This point is referred to as the "Date of Default", marking the first time a borrower fails to meet their payment obligations. For credit cards, the clock starts when the first missed payment causes the balance to become overdue. For promissory notes, the timeline begins on the due date specified in the note, or on the accelerated due date if the loan is accelerated.

Keep in mind that changes to state laws can impact these timelines.

Understanding this starting point is key to determining which actions can either restart or pause the clock.

Actions That Restart the Clock

Several actions can reset Ohio's six-year statute of limitations for debt collection:

• Making a voluntary partial payment: This acknowledges the debt and restarts the six-year clock from the date of the payment.
• Signing a written acknowledgment of the debt: If a borrower signs a document acknowledging the debt, it resets the timeline.
• Entering a new or modified payment agreement: This creates a new contract date, restarting the clock based on the updated terms.

Actions That Do Not Restart the Clock

Certain actions do not impact the running of the statute of limitations:

• Disputing the debt: Filing a dispute does not pause or reset the six-year period - it continues as normal.
• Partial payments on credit cards: In the 2016 Taylor Jarvis v. First Resolution Investment Corp. case, the Ohio Supreme Court ruled that partial payments made after the initial default do not restart the statute of limitations.
• Routine creditor correspondence: Account statements, balance notices, and charge-offs do not reset the clock.

Although these actions leave the timeline unaffected, some circumstances can pause it altogether. For example, the clock stops if the debtor is out of state, imprisoned, legally incapacitated, or files for bankruptcy. Once the situation is resolved, the clock resumes.

Debt Trading Strategies and Statute Limitations

Risks of Buying Time-Barred Debt

Purchasing debt that falls outside Ohio's six-year statute of limitations comes with distinct legal and financial challenges. Once a debt becomes time-barred, creditors lose the ability to file a lawsuit for collection. This limitation can significantly lower a portfolio's value. For instance, the Federal Trade Commission reported over 140,000 debt collection complaints in Q2 2025, with many linked to attempts to collect on time-barred debt.

The repercussions of mishandling time-barred debt can be severe. A notable example is the settlement involving Asset Acceptance, LLC.

"Few mistakes are more costly than pursuing a debt that can no longer be enforced. Litigation strategy, recovery prioritization, and portfolio valuation all depend on one overlooked factor: statute of limitations." – Tratta.io

To reduce these risks, it's essential to validate all key dates during portfolio intake. Make sure to document charge-off dates, last payment dates, and default dates before finalizing any purchase. Additionally, segment portfolios into categories like "in-statute", "nearing-expiration", and "time-barred." This ensures legal actions are appropriately limited, and any communication about time-barred debt must clearly state that the debt is no longer enforceable in court.

Strategy Comparison: Active vs. Time-Barred Debt Portfolios

Managing active and time-barred portfolios requires distinct strategies to optimize returns while staying compliant. Active portfolios, which remain within the statute of limitations, are generally more valuable because legal enforcement is still an option. On the other hand, time-barred portfolios, often purchased at lower prices, require transparency and voluntary resolution efforts.

Ohio's statute of limitations underwent a major change with Senate Bill 13, effective June 14, 2021. This legislation reduced the limit for written contracts from eight to six years, affecting the "shelf life" of older portfolios. Debt buyers must now adjust their strategies when evaluating portfolios created before this change. Platforms like Debexpert assist in maintaining compliance by offering tools for portfolio analytics, secure file sharing, and real-time communication to verify critical dates during due diligence.

These differences highlight the importance of using analytics to assess compliance risks and recovery potential accurately.

Using Analytics for Compliance and Risk Assessment

Advanced analytics are essential for managing the complexities of both active and time-barred portfolios. These tools help identify statute limitations and guide purchasing decisions. For example, reporting systems can flag accounts nearing legal deadlines, while automated workflows can block time-barred accounts from entering litigation queues or generating inappropriate legal communications. This prevents violations of the FDCPA and shields against regulatory scrutiny.

Ohio's borrowing statute adds another layer of complexity. Under Ohio Rev. Code § 2305.03(B), if a debt originated in a state with a shorter statute of limitations - such as Delaware's three-year limit for credit card debt - Ohio courts will apply the shorter period. Analytics tools capable of tracking the origination state of each account are critical for identifying these multi-state risks before making a purchase.

Validating charge-off and last payment dates remains a cornerstone of risk assessment. Debexpert's platform enhances compliance by offering advanced analytics that help buyers evaluate the statute status of various debt types across different states. This data-driven approach minimizes the risk of acquiring portfolios with hidden compliance issues and allows for more informed pricing based on realistic recovery potential.

Legal Compliance: Ohio and Federal Requirements

FDCPA and Ohio Collection Laws

Navigating federal and state regulations is critical when dealing with debt collection. The Fair Debt Collection Practices Act (FDCPA) explicitly prohibits third-party debt collectors from threatening legal action or suing over time-barred debts. However, this protection applies solely to collection agencies and debt buyers - not original creditors. Violating these rules can lead to statutory damages of up to $1,000, plus compensation for actual damages.

Ohio's Consumer Sales Practices Act (OCSPA) provides even broader protections. Unlike the FDCPA, the OCSPA extends to original creditors, lenders, debt buyers, and their attorneys, all of whom are classified as "suppliers" under state law. The act prohibits deceptive or unfair practices, such as misrepresenting the enforceability of time-barred debts or threatening actions that are legally impossible. Successful lawsuits under the OCSPA allow consumers to recover actual damages and up to $5,000 in noneconomic damages.

"A main purpose of the Fair Debt Collection Practices Act (FDCPA) is to prevent consumers from getting harassed by creditors. One of its key points is that collection agencies are not supposed to threaten legal action on a debt that falls outside the statute of limitations." - Jeremy Heck, Attorney, Luftman, Heck & Associates

Ohio Revised Code § 1319.12 adds further requirements for collection agencies pursuing legal action. Lawsuits must be filed in the debtor's county, handled by an Ohio-licensed attorney, and backed by a separate written debt assignment. Without proper documentation proving ownership, debt collectors cannot make valid claims in court.

Following these laws is essential to avoid the pitfalls outlined below.

Common Legal Mistakes to Avoid

One of the most critical errors is filing lawsuits on time-barred debt. A landmark example is the Ohio Supreme Court's 2016 decision in Taylor Jarvis v. First Resolution Invest. Corp.. In this case, First Resolution Investment Corp (FRIC) purchased credit card debt and sued for the balance plus 24% interest without presenting the original written agreement. The court determined that Delaware's shorter three-year statute of limitations applied under Ohio's borrowing statute, making the lawsuit invalid. Additionally, claiming 24% interest without a contract was deemed deceptive.

"A predictable result of debt buyers filing a high volume of lawsuits based on imperfect information is that the lawsuits are regularly filed after the right to collect debts has expired or seek a debt that is not owed." - Justice Paul E. Pfeifer, Ohio Supreme Court

Misrepresenting interest rates is another frequent issue. Debt buyers are prohibited from charging interest above Ohio's statutory rate (typically 4%) unless the original written contract explicitly allows a higher rate. Seeking unauthorized interest violates both the FDCPA and OCSPA.

Failing to disclose time-barred status when contacting consumers about expired debt is another compliance misstep. This lack of transparency can lead to penalties under both federal and state laws.

Overlooking Ohio's borrowing statute (R.C. 2305.03(B)) can also derail collection efforts. For debts originating in states with shorter statutes of limitations, such as Delaware’s three-year limit for credit card debt, Ohio courts will enforce the shorter period. Debt buyers must confirm the origination state for each account before pursuing collection or litigation.

Adhering to these rules can significantly reduce legal risks and improve compliance.

How Debexpert Supports Legal Compliance

Debexpert’s platform is designed to simplify compliance and reduce risks through advanced tools and processes. The portfolio analytics feature assesses the statute status of various debt types across states before purchase decisions. This helps buyers identify portfolios with potential compliance challenges, including those affected by Ohio's borrowing statute.

The platform's secure file sharing feature ensures critical due diligence documentation is verified. Buyers can review essential details like charge-off dates, last payment dates, and assignment records to confirm the debt’s age and ownership. This process minimizes the risk of acquiring time-barred accounts or portfolios with incomplete documentation.

By enabling real-time communication, Debexpert facilitates the exchange of compliance-related questions and documentation between buyers and sellers. Sellers can provide key materials such as assignment agreements, original contract terms, and state-of-origin data, helping buyers evaluate the enforceability of debts. This transparency prevents errors that have led to regulatory actions, such as the $2.5 million settlement involving Asset Acceptance, LLC.

Additionally, Debexpert’s auction setup and presale marketing tools allow sellers to categorize portfolios by statute status. By labeling accounts as "in-statute", "nearing-expiration", or "time-barred", sellers help buyers tailor their strategies and avoid accidental litigation on expired debts.

Strong compliance practices not only mitigate legal risks but also enhance portfolio management and value.

Conclusion

Main Points Summary

Ohio's six-year statute of limitations serves as the legal cutoff for most consumer debts, starting 30 days after the last charge or payment is made. This timeframe can reset if the debtor makes a voluntary partial payment or provides written acknowledgment of the debt. Once the statute expires, any lawsuits or threats of legal action would violate both the Fair Debt Collection Practices Act (FDCPA) and the Ohio Consumer Sales Practices Act (OCSPA).

In cases where debts originate in states with shorter statutes of limitations, Ohio may apply the shorter timeframe. For example, in the Taylor Jarvis case, Delaware's three-year limit was enforced instead of Ohio's six-year period. Debt buyers also need to verify interest rate agreements, as Ohio law caps interest at the statutory rate if no written contract exists.

Judgments in Ohio remain valid for five years but must be renewed to prevent dormancy, while mortgage deficiency claims have a shorter two-year statute of limitations. With the FTC logging over 140,000 debt collection complaints in Q2 2025 - many involving time-barred debts - compliance has become a critical focus. The $2.5 million settlement with Asset Acceptance highlights the financial risks of pursuing debts past their expiration without proper disclosures.

These points underscore the importance of precise documentation and careful portfolio management, which are further outlined in the following recommendations.

Next Steps for Debt Buyers and Sellers

To navigate Ohio's legal requirements effectively, debt buyers and sellers must adopt consistent and thorough practices.

• Date Validation: Confirm charge-off dates, last payment dates, and default dates during portfolio intake. This ensures clarity on the statute of limitations for each account.
• Portfolio Segmentation: Categorize accounts into "in-statute", "nearing expiration", and "time-barred" groups before initiating collection efforts. This reduces the risk of pursuing expired debts and triggering legal violations.
• Borrowing Statutes and Documentation: Audit portfolios for state-of-origin details and title documentation. This helps identify instances where shorter borrowing statutes apply and ensures compliance with relevant laws.
• Disclosure Templates: Implement standardized templates for time-barred debts, clearly stating their non-enforceability to maintain transparency.

Debexpert offers tools to simplify compliance. Its analytics can assess statute status across various debt types and states, while secure file-sharing features allow buyers and sellers to verify documentation like charge-off dates and assignment records. Real-time communication within the platform ensures quick resolution of compliance concerns. Additionally, sellers can use auction setup tools to organize portfolios by statute status, promoting transparency and enabling buyers to make informed decisions in line with Ohio's legal framework.

FAQs

How do I confirm the exact “date of default” for an Ohio debt?

To pinpoint the exact "date of default", start by reviewing the original debt documents or account statements. If those aren't accessible, you can reach out directly to the creditor or debt collector for clarification. Generally, the default date refers to the time when the borrower first failed to make a payment. This date is crucial because it determines the statute of limitations that applies to the debt.

When does Ohio’s borrowing statute shorten the time to sue on a debt?

Ohio’s borrowing statute can reduce the time available to file a lawsuit over a debt. It does this by applying the shorter statute of limitations from the state where the debt issue began, even if Ohio’s own statute of limitations allows more time. This rule can significantly impact how long creditors or debtors have to take legal action.

What must collectors disclose about time-barred debt in Ohio?

Collectors in Ohio must inform consumers if a debt is time-barred, meaning they can no longer legally sue to collect it. Additionally, they are prohibited from threatening legal action or providing misleading information about the debt's enforceability.

Related Blog Posts

• statute of limitations on debt collection
• statute of limitations mn debt collection
• michigan debt collection statute of limitations
• missouri debt collection statute of limitations