3.7.3.2.1 Borrowing statutes described
3.7.3.2.1 Borrowing statutes described
Over half the states have borrowing statutes that require, when an action arose elsewhere than the forum state, that the action can only be brought if within the limitations period that applies under the law of the state where the action arose. These borrowing statutes apply where the consumer resided in one state when incurring the debt but is sued in a second state where the consumer has since moved.290 This is a fairly common situation in which the debt being sued upon is a number of years old.
Even if a state does not have a borrowing statute, it is likely to use the limitations period of the state where the consumer resided at the time of the transaction, not the state to which the consumer later moved,291 at least when that limitations period is shorter.
Almost all borrowing statutes also apply when the cause of action arose in another state, even when the consumer has always resided in the forum state.292 That is, when state law determines that a debt arose in another state, then the limitations period of that other state acts as a bar to collection. This has significant practical import, as described in § 3.7.3.2.3, infra, because state law may determine that the cause of action arose where the creditor, not the consumer, resides. As such, the applicable limitations period may be the shorter of the forum state’s limitations period or the limitations period set out by the state where the creditor resides. Delaware, for example, has a three-year statute of limitations.
Footnotes
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290 {265} See, e.g., Ala. Code § 6-2-17; Alaska Stat. § 09.10.220; Ariz. Rev. Stat. Ann. § 12-506; Cal. Civ. Proc. Code § 361 (West); Colo. Rev. Stat. § 13-80-110; Del. Code Ann. tit. 10, § 8121; Fla. Stat. § 95.10; Haw. Rev. Stat. § 657-9; Idaho Code § 5-239; 735 Ill. Comp. Stat. § 5/13-210; Kan. Stat. Ann. § 60-516; Ky. Rev. Stat. Ann. § 413.320 (West); Mich. Comp. Laws § 600.5869; Minn. Stat. § 541.31; Mo. Rev. Stat. § 516.190; Mont. Code Ann. § 27-2-503; Nev. Rev. Stat. § 11.020; N.Y. C.P.L.R. 202 (McKinney); Ohio Rev. Code Ann. § 2305.03(B) (West); Or. Rev. Stat. § 12.430; 42 Pa. Cons. Stat. § 5521 (b); Tenn. Code Ann. § 28-1-112; Tex. Civ. Prac. & Rem. Code § 16.066(a) (West); Utah Code Ann. § 78B-2-103 (West); Va. Code Ann. § 8.01-247; W. Va. Code § 55-2A-2; Wis. Stat. § 893.07; Wyo. Stat. Ann. § 1-3-117. See also Wash. Rev. Code § 4.16.290 (use limitations period when accrued elsewhere between non-residents).
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291 {266} Jackson v. Midland Funding, L.L.C., 468 Fed. Appx. 123 (3d Cir. 2012).
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292 {267} See, e.g., Cal. Civ. Proc. Code § 361 (West); Colo. Rev. Stat. § 13-80-110; Del. Code Ann. tit. 10, § 8121; Fla. Stat. § 95.10; Haw. Rev. Stat. § 657-9; Idaho Code § 5-239; 735 Ill. Comp. Stat. § 5/13-210; Kan. Stat. Ann. § 60-516; Ky. Rev. Stat. Ann. § 413.320 (West); Mich. Comp. Laws § 600.5869; Minn. Stat. § 541.31; Mo. Rev. Stat. § 516.190; Mont. Code Ann. § 27-2-503; N.Y. C.P.L.R. 202 (McKinney); Nev. Rev. Stat. § 11.020; Ohio Rev. Code Ann. § 2305.03(B) (West); Or. Rev. Stat. § 12.430; 42 Pa. Cons. Stat. § 5521 (b); Utah Code Ann. § 78B-2-103 (West); Va. Code Ann. § 8.01-247; W. Va. Code § 55-2A-2; Wis. Stat. § 893.07; Wyo. Stat. Ann. § 1-3-117.
The California, Hawaii, Idaho, Minnesota, Nevada, and Utah statutes have an exception when the person holding the cause of action was a resident of the forum state at the time the action accrued. But the original creditor will almost never be a resident of the forum state and should not be able to take advantage of this exception.