What is the statute of limitations for MCA debt?

It depends on the state law that applies to your contract (the choice-of-law clause). For written contracts — which MCAs are — the period typically runs 3–10 years. Delaware: 3 years for written contracts (10 CFR §8106). New York: 6 years (CPLR §213). Georgia: 6 years for simple written contracts. Texas: 4 years. Florida: 5 years. The clock generally starts running from the date of default, not the funding date.

Does the statute of limitations bar the debt, or just the lawsuit?

Only the lawsuit. The debt itself doesn't disappear when the SOL expires — it becomes 'time-barred,' meaning the funder can no longer sue to collect, but the debt still exists. They can still attempt informal collection (calls, letters), still report it to credit bureaus within the FCRA 7-year window, and still try to get you to make a payment that resets the clock. Affirmative defense — you must raise it in the lawsuit or it's waived.

Can a payment or acknowledgment restart the statute of limitations?

Yes, in most states. A partial payment, written acknowledgment of the debt, or even some forms of oral acknowledgment can reset the SOL clock to zero. This is why collectors push hard for any payment — even $20 — on old MCA debt. Never make a payment or acknowledge an old MCA debt in writing without first confirming whether the SOL has run. Get it in writing from your attorney before doing anything.

Does the SOL apply per missed payment or to the whole balance?

Both, depending on the contract and jurisdiction. If the MCA has an acceleration clause and the funder properly declared default and accelerated the balance, the SOL clock starts on the acceleration date for the whole accelerated balance. If acceleration wasn't properly invoked, each missed daily payment can theoretically have its own SOL clock. In practice, most courts treat the acceleration date as the trigger for the whole debt.

If my MCA contract picks Delaware law but I'm in California, which SOL applies?

Generally the law named in the choice-of-law clause governs — so Delaware's 3-year SOL in this example. But California has 'borrowing statutes' (CCP §361) that can apply the shorter of California's SOL or the foreign state's SOL when a cause of action arose in another state involving non-resident parties. The interaction is complex and varies by state; consult counsel before relying on SOL as a defense.

Can the funder sue me in a different state's court to extend their SOL?

They can try, but courts apply choice-of-law rules to figure out the right SOL regardless of forum. The funder choosing a long-SOL forum doesn't automatically give them more time — the court applies the law that should govern under conflict-of-laws principles. That said, the cost and complexity of fighting choice-of-law in a distant forum often discourages SOL defenses, which is part of why funders pick the forums they do.

MCA statute of limitations — the detailed merchant guide (2026)

The statute of limitations is one of the most underused defenses in MCA collections. Here's exactly when the clock starts, what resets it, and how the state-by-state rules actually work in practice.

The 60-second answer

The statute of limitations (SOL) is the legal deadline by which the funder must file a lawsuit to collect on a defaulted MCA. Miss the deadline, and the funder loses the ability to sue — though they don't lose the debt itself.

For MCAs, the applicable SOL is typically the state's "written contract" period under whichever state law the contract's choice-of-law clause picks. That period ranges from 3 years (Delaware) to 10 years (Rhode Island, Indiana). Most major MCA funders pick Delaware, New York, or Georgia in their contracts, so the practical answer for most merchants is 3, 6, or 6 years respectively, running from the date of default or acceleration.

The big traps: partial payments and written acknowledgments can restart the clock; the SOL is an affirmative defense you must raise in the lawsuit or it's waived; and the SOL only bars the lawsuit, not the underlying debt — so collection calls and credit reporting can continue.

How the SOL clock works

When the clock starts

For MCA debt, the clock typically starts on one of three events:

Date of default — the first missed payment that triggers the contract's event-of-default definition.
Date of acceleration — when the funder formally declares the entire unpaid balance immediately due and payable. Most modern MCAs accelerate automatically or upon written notice after default.
Date of last payment — in some jurisdictions, the clock runs from when the merchant last made a payment, treating each payment as a fresh acknowledgment.

The interplay matters. If the funder claims acceleration occurred on the missed payment date but never sent formal notice, the merchant may be able to argue the accelerated balance never triggered the SOL clock — leaving each daily payment with its own (already-expired) clock. Procedurally finicky, but real.

When the clock stops

Things that toll (pause) or restart the SOL clock:

Partial payment — almost universally restarts the clock in most states. Even a $1 payment after the SOL has run can revive the entire debt.
Written acknowledgment — a letter, email, text, or signed document acknowledging the debt restarts the clock in most jurisdictions.
Promise to pay — an unconditional written promise to pay can restart the clock independently of acknowledgment.
Bankruptcy filing — automatically tolls the SOL during the bankruptcy.
Out-of-state absence — many states toll the SOL when the defendant is out of the state, though there are due process limits.
Fraudulent concealment — if the merchant fraudulently concealed assets or the funder couldn't reasonably discover the default, the clock may toll until discovery.

State-by-state SOL for written contracts (the practical chart)

Short SOL states (3–4 years)

Delaware — 3 years (10 Del. C. §8106). Major MCA forum. If your contract picks Delaware law, this is one of the shortest SOLs in the country — useful for merchants, problematic for funders. Some Delaware funders have moved away from Delaware choice-of-law for this reason.

Texas — 4 years (Tex. Civ. Prac. & Rem. Code §16.004). Common merchant jurisdiction.

California — 4 years for written contracts (CCP §337). Combined with California's borrowing statute, often produces shorter effective SOLs than the chosen law would suggest.

Medium SOL states (5–6 years)

Florida — 5 years (Fla. Stat. §95.11(2)(b)). Common merchant jurisdiction with heavy MCA enforcement activity.

New York — 6 years (CPLR §213). Major MCA forum pre-2019 (COJ ban). Still a common choice-of-law selection for funders.

Georgia — 6 years for simple written contracts (OCGA §9-3-24). Heavy MCA enforcement forum, especially Cobb County state court.

New Jersey — 6 years (NJSA §2A:14-1).

Pennsylvania — 4 years (42 Pa.C.S. §5525).

Virginia — 5 years for written contracts (VA Code §8.01-246).

Long SOL states (7–10 years)

Indiana — 6 years for written contracts (some categories up to 10).

Rhode Island — 10 years (R.I. Gen. Laws §9-1-13).

Kentucky — 10 years for written contracts (KRS §413.090).

Ohio — 8 years for written contracts (ORC §2305.06).

Maine — 6 years, with extensions for sealed instruments.

The above is illustrative, not exhaustive — verify your state's current statute with counsel. SOL periods are amended periodically; the figures here reflect the most recent published statutes as of 2026 but should not be relied on as legal advice for your specific situation.

Worked example: SOL on a defaulted Delaware-law MCA

A Florida merchant takes a $60,000 MCA in March 2021 with Delaware choice-of-law. In November 2021, the merchant defaults — eight months of payments made, $32,000 of $84,000 payback complete. Funder accelerates the remaining $52,000 balance via written notice dated November 15, 2021. Funder makes no further enforcement effort.

Choice-of-law SOL: Delaware 3 years for written contracts.
Clock starts: November 15, 2021 (acceleration date).
SOL expires: November 15, 2024.
If funder files suit on November 16, 2024 or later: Merchant pleads SOL as affirmative defense, court dismisses. Debt becomes "time-barred" — uncollectible by lawsuit but still owed.

If, however, the merchant made a $500 partial payment in March 2023, the clock generally resets to March 2023 + 3 years = March 2026. That single payment cost the merchant 16 additional months of exposure.

The "zombie debt" trap — old MCA debt sold to collectors

Many funders sell defaulted MCA paper to debt buyers for pennies on the dollar. The buyer then attempts to collect — often years after the SOL has run. This is the "zombie debt" pattern familiar from consumer collections.

Common zombie-debt tactics merchants should recognize:

"Pay just $50 today to settle for $5,000." The $50 payment resets the SOL clock and revives the entire debt. The "settlement" promise is rarely honored — after the payment, the collector pursues the full balance.
"Sign this hardship affidavit so we can reduce your balance." The affidavit is a written acknowledgment that may restart the SOL.
"We can put you on a payment plan — just $25/month." Each payment keeps the clock alive indefinitely.
Calls "from the legal department" threatening immediate lawsuit. If the SOL has run, the threat is hollow — but the goal is to scare you into a payment that revives the debt.

The defensive posture: never make a payment, never sign an acknowledgment, never confirm in writing that the debt is owed without first confirming the SOL status with counsel. If a collector is calling about an MCA debt that's more than a few years old, the SOL is the first thing to check.

Using SOL as an affirmative defense in litigation

SOL is an affirmative defense. That means the burden is on the defendant (you) to raise it in the answer to the complaint. If you don't raise SOL in your answer, you waive the defense and the lawsuit proceeds as if SOL didn't exist.

Procedural mechanics:

Plead SOL in your answer. Default judgment if you don't answer at all — SOL is waived along with everything else.
Move for summary judgment on SOL grounds. If the dates are clear from the complaint, this can dispose of the case quickly.
Prepare for tolling arguments. Funder will argue payments, acknowledgments, bankruptcy stays, or out-of-state absence extended the clock.
Choice-of-law motion. If the contract picks short-SOL state but funder filed in long-SOL state, the threshold question is which law applies.

Credit reporting and SOL — different clocks

One important clarification: the SOL for lawsuits is a different clock from the Fair Credit Reporting Act (FCRA) reporting period. Even after the SOL bars suit, an MCA default can stay on personal credit (if reported, which not all funders do) for up to 7 years from the date of first delinquency. So time-barred MCA debt can still depress your credit score even though it can no longer be sued on.

The flip side: a time-barred debt that doesn't get reported (or whose reporting period has also run) can simply sit dormant indefinitely, never affecting your credit and never being enforceable. That's the practical end state for most truly old MCA debt that hasn't been refreshed by payments or acknowledgments.

Practical checklist if you're being contacted about old MCA debt

Pull the original contract. Find the choice-of-law clause.
Identify the date of default and acceleration. Pull bank statements and the funder's default notice.
Calculate the SOL. Count from acceleration date forward by the relevant state's written-contract SOL.
Identify any payments or acknowledgments since default. Each may have reset the clock.
Do not respond in writing until you have a clear picture. Verbal responses ("I don't owe this," "the SOL has run") are usually safe; written ones can create new acknowledgment evidence.
Send a debt validation request if a collection agency is contacting you. Forces them to produce documentation, which often takes them off the file entirely.
If sued, answer the complaint with SOL as an affirmative defense. Never let a default judgment enter on a time-barred debt.
Engage MCA-defense counsel for any contested matter. SOL litigation is technical and the funder will fight tolling aggressively.

Frequently asked questions

What is the statute of limitations for MCA debt?: It depends on the state law that applies to your contract (the choice-of-law clause). For written contracts — which MCAs are — the period typically runs 3–10 years. Delaware: 3 years for written contracts (10 CFR §8106). New York: 6 years (CPLR §213). Georgia: 6 years for simple written contracts. Texas: 4 years. Florida: 5 years. The clock generally starts running from the date of default, not the funding date.
Does the statute of limitations bar the debt, or just the lawsuit?: Only the lawsuit. The debt itself doesn't disappear when the SOL expires — it becomes 'time-barred,' meaning the funder can no longer sue to collect, but the debt still exists. They can still attempt informal collection (calls, letters), still report it to credit bureaus within the FCRA 7-year window, and still try to get you to make a payment that resets the clock. Affirmative defense — you must raise it in the lawsuit or it's waived.
Can a payment or acknowledgment restart the statute of limitations?: Yes, in most states. A partial payment, written acknowledgment of the debt, or even some forms of oral acknowledgment can reset the SOL clock to zero. This is why collectors push hard for any payment — even $20 — on old MCA debt. Never make a payment or acknowledge an old MCA debt in writing without first confirming whether the SOL has run. Get it in writing from your attorney before doing anything.
Does the SOL apply per missed payment or to the whole balance?: Both, depending on the contract and jurisdiction. If the MCA has an acceleration clause and the funder properly declared default and accelerated the balance, the SOL clock starts on the acceleration date for the whole accelerated balance. If acceleration wasn't properly invoked, each missed daily payment can theoretically have its own SOL clock. In practice, most courts treat the acceleration date as the trigger for the whole debt.
If my MCA contract picks Delaware law but I'm in California, which SOL applies?: Generally the law named in the choice-of-law clause governs — so Delaware's 3-year SOL in this example. But California has 'borrowing statutes' (CCP §361) that can apply the shorter of California's SOL or the foreign state's SOL when a cause of action arose in another state involving non-resident parties. The interaction is complex and varies by state; consult counsel before relying on SOL as a defense.
Can the funder sue me in a different state's court to extend their SOL?: They can try, but courts apply choice-of-law rules to figure out the right SOL regardless of forum. The funder choosing a long-SOL forum doesn't automatically give them more time — the court applies the law that should govern under conflict-of-laws principles. That said, the cost and complexity of fighting choice-of-law in a distant forum often discourages SOL defenses, which is part of why funders pick the forums they do.