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When googling for "debt prescription" I get a lot of hits in South Africa. Is it called something else in US English? And to the point, how does it work in America? Specifically contracts such as "When you deliver X to me, I pay you Y dollars" (with no date specified for the delivery).

closed as unclear what you're asking by Pete B., Dheer, Michael, D Stanley, MD-Tech Dec 19 '17 at 14:36

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    Where did you come across the term? If you tell us why you are asking, we can perhaps provide a better explanation to clear up your misunderstanding. – Ben Miller - Reinstate Monica Dec 15 '17 at 16:00
  • This seems to be related to the statute of limitations (typically 7 years). – RonJohn Dec 15 '17 at 16:24
  • To me it seems more related to debt forgiveness or discharge (bankruptcy). – D Stanley Dec 15 '17 at 16:29
  • @BenMiller Where I live, for most debts, they are cancelled after ten years unless you remind the debtor about the debt. Every time you remind the debtor a new ten year period begins. – d-b Dec 15 '17 at 16:32
  • You should edit that information into the question. Something like "In South Africa, we have a concept called debt prescription, which means ..." – Brythan Dec 16 '17 at 4:46
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"Prescription" in South Africa appears to mean that a debtor is no longer legally required to pay a debt. While there isn't a strong general concept for this in the US (that is, it doesn't have its own word that I know of), there are statutes of limitations imposed on the collection of debt. After this period a collector may still ask for payment (depends on the state) but cannot use the courts to collect a debt. Also if you tell them to stop contacting you, they probably have to comply. Statutes of limitations vary by state.

Statutes of Limitations on Debt by State

In Utah, your statute of limitations will be either 4 or 6 years, depending on the nature of the debt. However, if the creditor has obtained a court judgement against you, then there is a separate (longer) statute of limitations. In Utah it's 8 years.

Many things can reset your statute of limitations, such as acknowledging the debt, making a payment, or making any other agreement with the creditor.

Things that will generally reset the statute of limitations

Notice that having the debt legally non enforceable will not affect whether the credit ratings agencies retain the debt on your record.

Some debts also do not have statutes of limitations:

  • Federal student loans
  • Alimony or child support
  • Taxes and government fines

Though there is a statute of limitations on when you can get your money back from the government if you overpay your taxes. Go figure!

  • For US Federal taxes there is generally a 10-year limit on collection, but it can be waived or extended in some cases -- if you read (as I occasionally do) parts of IRM (IRS' internal process manual) or reports by NTA and TIGTA, computing and checking 'CSED' (the Collection Statute Expiration Date) is a big deal for them. – dave_thompson_085 Dec 17 '17 at 9:01

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