The Ohio legislature has passed a bill that will reduce the statutes of limitations on filing lawsuits to collect on debts to four or six years, depending on whether a written contract exists. The bill will now proceed to Gov. Mike DeWine for his signature to become law, and he is expected to sign it, according to a report that was published by ACA International.
The bill, SB13 in the Senate and HB251 in the House would reduce the statute of limitations in situations where there is a written contract to six years, from eight. In situations where there is not a written contract, the statute of limitations would be set at four years. The bill was introduced by state Sen. George Lang and state Rep. Brett Hillyer, both Republicans.
The bill also defines consumer transactions as those that are “incurred primarily for personal, family, or household purposes, based upon any contract, agreement, obligation, liability, or promise, express or implied, including an account stated, whether or not reduced to writing or signed by the party to be charged by that transaction.”
The statute of limitation clock on consumer transactions starts running 30 calendar days after the date of last charge or payment by the consumer, whichever is later.
The bill, when it was originally introduced in 2019, sought to establish a three-year statute of limitations.
A number of industry participants, including the Ohio Receivables Management Association, RMA International, and the National Creditors Bar Association participated in a hearing earlier this week to voice their support for the bill. According to NCBA, the average statute of limitations for written contracts is 5.2 years and 21 states have statutes of limitations that are six years or longer.
