Debt collection remains a significant compliance concern in Virginia, where creditors and third-party collection agencies have to follow strict state and federal regulations. Recent data from the Federal Trade Commission reveals a sharp increase in consumer grievances. Over 140,000 complaints about debt collection were recorded in the second quarter of 2025, compared to roughly 44,000 during the same period the previous year.

This surge underscores how easily agencies can face scrutiny when they overlook legal boundaries such as the statute of limitations. In this guide, we explain Virginia’s statute of limitations for debt and outline how it applies to different types of obligations, including medical debt.

Quick look:

• The statute of limitations in Virginia sets a legal deadline, usually three to five years, for creditors to file lawsuits on most debts.
• Each debt type follows a different timeline. Credit cards and medical bills typically have a three-year timeline, while written contracts and mortgages extend to five.
• Acknowledging an old debt or making a partial payment can reset the limitation period, reopening the window for legal action.
• Attempting to collect or sue on time-barred debts without clear disclosure violates both state law and federal regulations, such as the FDCPA.
• Regular compliance checks, accurate recordkeeping, and awareness of legal updates are essential to protect agencies from liability and ensure ethical collections.

What Is the Statute of Limitations on Debt in Virginia?

The statute of limitations defines how long a credit-issuing company or collection agency has to file a lawsuit to recover an unpaid debt. In Virginia, this time limit is outlined in Virginia Code §8.01-246, which sets specific deadlines based on the type of agreement—whether written, oral, or open-ended, such as a credit card agreement.

According to Code of Virginia §8.01-246(2):

“Subject to the provisions of § 8.01-243 regarding injuries to person and property and of § 8.01-245 regarding the application of limitations to fiduciaries, and their bonds, actions founded upon a contract, other than actions on a judgment or decree, shall be brought within the following number of years next after the cause of action shall have accrued:

....... 2. In actions on any contract that is not otherwise specified and that is in writing and signed by the party to be charged thereby, or by his agent, within five years, whether such writing be under seal or not."

In simple terms, this section means that if a contract is in writing and signed by the person responsible for the debt, the creditor has five years from the date the debt became due to file a lawsuit. It applies to all written agreements that are not otherwise covered by a more specific rule in Virginia law.

It is important to understand that the statute of limitations does not erase the debt itself. Instead, it limits the creditor’s ability to enforce collection through the courts once the period expires.

Debts that exceed this timeframe are considered time-barred. While collectors can still contact consumers about these debts, attempting to sue over them can lead to legal violations and regulatory penalties. Now, let us look at how the time limits differ depending on the type of debt in Virginia.

Suggested Read: Nevada Statute of Limitations Explained

Time Limits by Type of Debt in Virginia

Each type of debt falls under specific legal timelines that dictate how long a creditor or collection agency has to file a lawsuit. These timelines are designed to promote fairness and accuracy, ensuring that old, hard-to-verify claims do not surface years after default.

Table showing statute of limitations in Virginia, as per the type of debt:

This can also be explained differently in broader terms:

• Oral contracts – 3 years (§ 8.01-246(4))
• Written contracts – 5 years (§ 8.01-246(2))
• Contracts under seal – 20 years (§ 8.01-246(1))
• Promissory notes – 6 years (§ 8.3A-118(a))
• Open accounts – 3 years (unless written terms extend it)
• Judgments – 20 years (§ 8.01-251(A))

For collection agencies managing thousands of accounts, manually tracking these timelines can be challenging. Tratta simplifies this with automated compliance monitoring, flagging accounts nearing expiration so they are not pursued past the legal limit. Its reporting and analytics tools provide real-time insights into aging accounts, helping teams prioritize cases that remain actionable. Schedule your free demo today.

However, things have recently changed, especially when it comes to medical debt. The rules and timelines for collecting it are different. This is discussed in the next section.

Statute of Limitations on Medical Debt in Virginia

Virginia has updated its rules for collecting medical debt through legislation that changes how long providers and collectors have to sue. As per the amended section of the Virginia Code, § 8.01-246, an action based on medical debt must generally be filed within three years of the final invoice or the breach of a payment plan.

This is shortened from the previous five years permitted for collecting regular medical debt through a written contract. Time-barred medical debt remains collectible by non-legal means, but legal enforcement becomes much riskier for agencies and providers.

Key details to be aware of under Virginia Code § 8.01-246:

• Statute of Limitations: Medical debt claims must be filed within three years of the due date on the final invoice for services rendered.
• Delayed Billing Considerations: The statute clock typically starts at the issuance of the final invoice, though insurance processing or hospital billing delays can shift this start date.
• Payment Plan Exceptions: If a debtor defaults on a payment plan, the three-year countdown begins from the date of that default, not the original service date.
• Compliance with Federal Rules: Healthcare providers and collectors must also follow the No Surprises Act and the Fair Debt Collection Practices Act (FDCPA), both of which regulate communication and billing transparency.
• Compliance Impact: Failure to recognize these timelines or dual compliance requirements can result in time-barred lawsuits and significant legal exposure.

Virginia law prohibits any medical provider, emergency services agency, or debt collector from reporting medical debt to consumer reporting agencies under Section § 59.1-444.4. This includes both the original medical creditor and any third-party collection entity. Willful violations are considered prohibited practices under Virginia’s consumer protection laws and may trigger civil penalties under Chapter 17 enforcement provisions.

At Tratta, we closely monitor updates to state and federal debt collection laws to help agencies stay compliant at all times. For instance, our Payment Portal was recently reviewed for ADA compliance, and minor accessibility issues were promptly resolved, demonstrating our ongoing commitment to ethical, transparent, and lawful collections.

Suggested Read: Understanding Statute of Limitations on Medical Debt in California

When Does the Statute of Limitations Start in Virginia?

In Virginia, the statute of limitations begins when the cause of action accrues—that is, when the creditor first gains the legal right to sue for repayment. This point usually depends on when the borrower defaulted or made their last payment on the account.

Facts to keep in mind as per Virginia Code § 8.01-230:

• Cause of Action Accrual: The limitation period begins when the debtor fails to make a required payment or breaches the terms of the agreement.
• Effect of Partial Payments: If a debtor makes a partial payment on an old debt, the statute of limitations may restart from that payment date.
• Written Acknowledgment: A written promise or acknowledgment of the debt by the debtor can also reset the limitations period.
• Account Type Matters: The start date can vary depending on whether the debt is based on a contract, account, or judgment.
• Collection Agency Risk: Pursuing a time-barred debt can result in FDCPA violations and consumer litigation.

Example:

If a debtor defaults on a credit card in 2019 but makes a small payment in 2022, the statute of limitations restarts in 2022—giving the creditor a new window to file a lawsuit.

Getting this timing wrong can open the door to lawsuits, compliance penalties, and damaged credibility under the Fair Debt Collection Practices Act (FDCPA). While most debts follow Virginia’s standard limitation periods, not all do.

Certain obligations fall under special rules or exceptions that extend—or in rare cases, suspend—the clock entirely. We will look at these exceptions in the following section.

Exceptions to the Virginia Debt Statute of Limitations

While Virginia law establishes general limitation periods for different types of debt, several exceptions can modify how and when these time limits apply. These exceptions are designed to ensure fairness in cases where debt collection or discovery is delayed for legitimate reasons.

These exceptions are:

• Debtor’s Absence from the State: If a debtor leaves Virginia after defaulting, the limitation period may pause until they return.
• Bankruptcy Proceedings: When a debtor files for bankruptcy, the statute of limitations on related debts is typically paused (tolled) until proceedings conclude.
• Fraud or Concealment: If a debt involves fraud or the creditor was prevented from discovering the cause of action, the limitation period begins only when the fraud is uncovered.
• Written Acknowledgment of Debt: A signed acknowledgment or partial payment can restart the statute clock, effectively giving collectors a new window to pursue recovery.
• Government and Tax Debts: Debts owed to state or federal agencies, such as unpaid taxes or fines, may not have a traditional statute of limitations or may follow separate administrative timelines.

These exceptions highlight the importance of tracking every legal and factual element surrounding a debt before initiating recovery. Just as creditors and agencies must observe limitation rules, debtors, too, have rights and remedies under Virginia law. These are outlined in the next section.

Suggested Read: Essential TCPA Compliance Rules Every Debt Collection Agency Should Know

Legal Boundaries for Collection Agencies

When collecting debts in Virginia, agencies must be aware of the legal rights available to consumers. Ignoring these can expose collectors to lawsuits, penalties, and reputational damage.

Below are the key debtor protections under both state and federal law—and how agencies can navigate them responsibly.

• Virginia Consumer Protection Act (VCPA)
• Debtors can sue for unfair or deceptive collection practices under the VCPA. Violations may lead to actual damages, attorney’s fees, and, in some cases, punitive damages.
• How agencies can avoid this: Maintain full transparency in communication, ensure that every statement made to a debtor is verifiable, and document all interactions to prove good-faith compliance.
• Fair Debt Collection Practices Act (FDCPA)
• This federal law prohibits abusive, misleading, or unfair collection behavior. Collectors pursuing debts past the statute of limitations without proper disclosure can face federal penalties.
• How agencies can avoid this: Flag all time-barred accounts in your system, train agents to disclose when a debt is beyond the limitation period, and use compliance-verified scripts for outreach.
• Fair Credit Reporting Act (FCRA)
• Consumers can dispute outdated or inaccurate debt information on their credit reports. Generally, debts older than seven years cannot appear on most credit files.
• How agencies can avoid this: Sync reporting schedules with credit bureaus and conduct regular data audits to promptly remove obsolete or inaccurate entries.
• Cease-and-Desist Rights
• Debtors can formally request that collectors stop contacting them, except for legal notices. Continued contact after such a request can trigger civil action.
• How agencies can avoid this: Implement automated compliance rules that flag and halt communication once a cease-and-desist notice is received, ensuring no further contact beyond legal correspondence.
• Defensive Use of the Statute of Limitations
• If the limitation period has expired, debtors can use it as a defense in court, preventing creditors from obtaining a judgment.
• How agencies can avoid this: Track limitation timelines automatically through compliance tools and verify every account’s enforceability before initiating litigation or collection activity.

For collection agencies, knowing these debtor rights is not just about compliance. It is about maintaining credibility and avoiding costly legal exposure. The next section discusses practical tips to help your agency stay compliant with Virginia’s statute of limitations.

Tips to Remain Compliant With the Statute of Limitations

A single misstep, such as pursuing a time-barred debt or misstating an account's age, can expose your agency to lawsuits and regulatory scrutiny. Building strong internal processes ensures not only adherence to the law but also smoother interactions with consumers.

These are a few best practices to remain compliant and overboard:

• Maintain Accurate Records: Keep detailed documentation of all debts, including the date of the last payment, written agreements, and communication history.
• Verify Debt Age Before Action: Confirm the “cause of action” date before initiating any legal or collection process to avoid pursuing time-barred accounts.
• Train Collection Staff Regularly: Conduct periodic training on Virginia’s evolving debt laws, including distinctions between written, oral, and open-ended accounts.
• Update Policies for Federal Rules: Align your procedures with FDCPA and CFPB guidance to ensure consistent and fair communication with consumers.
• Implement a Compliance Calendar: Use automated systems to flag accounts nearing expiration, preventing accidental litigation beyond the allowed timeframe.
• Communicate Transparently: When collecting on time-barred debt, clearly disclose that it cannot be pursued in court under current law.

While these practices set a solid foundation, technology can make compliance far more reliable. The next section explains how Tratta helps agencies automatically stay aligned with statute of limitations requirements and maintain full transparency in debt collection.

Suggested Read: Statute of Limitations on Portfolio Recovery Debts

Operationalizing Statute of Limitations Compliance with Tratta

Tratta is purpose-built for agencies handling complex regulatory environments. Its platform combines automation, auditability, and real-time intelligence to help teams manage statute-of-limitations (SOL) risk with precision.

These are the core features that support enforceability tracking, legal defensibility, and proactive compliance:

1. Consumer Self-Service Portal

Agents and debtors both benefit from a portal that allows account holders to initiate payment themselves. This reduces manual input, ensures the last-payment date is captured accurately, and helps flag when the statute clock should stop.

2. Embedded Payments

Payments made via secured inline links or portals automatically log transaction timestamps. This ensures you know exactly when a payment was received so you can determine if the SOL has been interrupted or reset.

3. Multilingual Payment IVR

By supporting multiple languages, Tratta’s IVR system reduces misunderstandings around payment dates and default timing. This clarity helps establish solid “cause of action” dates, which are central to statute of limitations compliance.

4. Omnichannel Communications

Tratta unifies email, SMS, voice, and portal messaging into a single system—so all communications and contact attempts are tracked, timestamped, and auditable. This helps validate whether you pursued an account within the enforceable window.

5. Campaign Management

Automated campaigns include configuration rules that filter out accounts that have passed their enforceable dates. The feature prevents inappropriate legal escalation on potentially time-barred debt.

6. Reporting & Analytics

Real-time dashboards track metrics such as “days since last payment” and “days since default” across the portfolio. These visual tools provide early warning if an account approaches or passes its SOL window, supporting proactive compliance.

7. Customization & Flexibility

Agencies can tailor the system to reflect Virginia’s specific limitations law (e.g., written vs. oral contract timeframes). This ensures that workflow rules respect state-law boundaries rather than generic defaults.

8. Integrations / API

Tratta integrates with your existing CRM, dialer, and payment gateway via API, so each transaction or communication updates the central system immediately. This helps maintain an accurate and timestamped audit trail for each account.

9. Security & Compliance

Data security and compliance frameworks are built into Tratta’s architecture (including SOC 2, encrypted communications, and audit logs). With these safeguards, you can prove decisions were data-driven and compliant—key for defending against SOL or FDCPA challenges.

To see these features in action, consider how FMA Alliance employed Tratta to grow without legal exposure.

Case Study: FMA Alliance

FMA Alliance, a national receivables management firm, adopted Tratta in 2020 to modernize its operations under tightening regulatory scrutiny. Within 12 months, they scaled recovery volume by 5X without compromising compliance. Tratta’s rapid onboarding (completed in 30 days) enabled FMA to deploy complex settlement workflows and automate statute-aware segmentation.

The result: a 99.99% customer satisfaction rate and zero escalations tied to time-barred debt.

For agencies managing high-volume portfolios across multiple jurisdictions, Tratta offers more than automation—it delivers clarity on enforceability, legal defensibility, and operational control.

Conclusion

Understanding and respecting the statute of limitations is necessary for ethical and effective debt recovery. Failing to track limitation periods accurately can expose collection agencies to lawsuits, reputational harm, and federal scrutiny. Staying informed ensures that every collection effort aligns with both Virginia’s legal framework and federal consumer protection laws.

At Tratta, compliance is built into every layer of our technology. From automated tracking of limitation dates to detailed reporting and audit-ready documentation, Tratta helps agencies minimize risk while maximizing recovery efficiency. Our AI-driven tools and data transparency make it easier for collection teams to operate confidently, ethically, and within the bounds of the law.

Tratta simplifies compliance so you can focus on what matters most—recovering smarter, faster, and lawfully. Schedule a free demo today.

Frequently Asked Questions

1. Can a creditor still contact a debtor after the statute of limitations expires?

Yes. A creditor or collector may contact the debtor about repayment, but they cannot threaten or initiate a lawsuit to collect the debt once it becomes time-barred. Misrepresenting a time-barred debt as legally enforceable violates the FDCPA.

2. Does filing a lawsuit after the statute of limitations automatically make it invalid?

Not automatically. The debtor must raise the expired statute as a defense in court. If they fail to do so, the court could still enter a judgment against them.

3. How does bankruptcy affect the statute of limitations on debt collection?

Filing for bankruptcy pauses the statute of limitations while the case is pending. Once the bankruptcy is discharged or dismissed, the limitation clock resumes from where it stopped.

4. Do out-of-state debts follow Virginia’s statute of limitations if the debtor moves?

Generally, the statute of limitations from the state where the debt originated applies, unless the debt is refiled or governed by a contract under Virginia law. Legal advice may be necessary for multi-state cases.

5. Are there penalties for attempting to collect a time-barred debt in Virginia?

Yes. Pursuing collection without disclosing that a debt is time-barred can result in penalties under both the FDCPA and the Virginia Consumer Protection Act, including fines and civil liability.