Q: In civil law, there is a concept called “statute of limitations” that limits the amount of time in which someone can claim money owed to him. The exact time limitation varies from one jurisdiction to another, but if, for instance, someone borrowed money and the statute of limitations expires, the lender can no longer collect that loan.
Is that law binding in halachah?
A: It would appear that the concept of a statute of limitations does exist in halachah. The Mishnah (Kesubos 104a; cited as halachah in Even Ha’ezer 101:1) rules that a widow may claim her kesubah for 25 years after her husband’s passing. After that deadline, unless the actual kesubah document is still in her possession, even if the heirs acknowledge that the amount due to her was never paid, she still may not collect it, because we consider her silence for that length of time an indication that she is mochel (forgoes) her right to payment (see Ketzos Hachoshen 12:1 and Nesivos ibid. 5 as to why an unverbalized mechilah is valid in this case).
But that case cannot be cited as proof that a statute of limitations applies to other financial obligations, because there are two reasons that a widow is more likely to forgive her kesubah: one, she is grateful to the orphans for having covered her expenses for all those years, and two, she is not losing money that was already hers, because she did not lend the money that was owed to her from her kesubah, to her husband (Rashi to Kesubos ibid. s.v. Almanah).
In the case of a loan, these reasons do not apply. Therefore, the borrower is obligated to repay the loan even if the loan contract is no longer in the lender’s possession, regardless of how much time has passed (Shulchan Aruch, Choshen Mishpat 98:1). Even if the lender was meya’eish (despaired) from collecting the loan, it does not prevent him from collecting (ibid.; see Taz ibid. 163:3 and Chacham Tzvi ibid.). Even if the lender did not attempt to collect the loan for many years after the borrower passed away, and even if he had been desperate for money during that time and he never tried to collect, that does not invalidate the loan contract (Choshen Mishpat 61:9).
Nevertheless, when a loan contract of this sort is presented in beis din, the Dayanim should investigate why the lender did not attempt to collect until now (ibid. 61:9 & 98:2). If beis din is convinced that the debt was never repaid, the lender may collect. But if the lender is evasive or does not have convincing answers for beis din’s questions, it is considered a din merumeh (fraudulent case; see ibid. 15), and beis din must write on the contract that it may not be used to collect (see Divrei Geonim 102:24).
Some poskim write that the custom is that if a loan contract of an interest-free loan is three years past due — or six years, if the loan is an investment (through a heter iska), which would explain why the lender was in no rush to collect — then the contract expires, and the loan is now considered a milveh al peh (contract-free loan). When it turns into a milveh al peh, the borrower would be absolved from payment if he’s willing to swear that he repaid the loan, even if the contract states that the lender is trusted if he claims that the loan has not been repaid (see Nesivos 61, Chiddushim 18; Kesef HaKodashim 61:9; Shu”t Beis Shlomo, Choshen Mishpat 39, s.v. Od). But it seems that this custom is not prevalent nowadays.
Now, there is generally a concept of dina d’malchusa dina — civil law of the government is binding in halachah — but that is true only if it does not contradict halachah (see Pis’chei Choshen, Halva’ah 2:[72]). Furthermore, in most jurisdictions, the statute of limitations does not absolve the borrower from payment; it only means that the courts will not assist the lender in attempting to collect the loan. Moreover, if the borrower does not claim that the statute of limitations has expired immediately upon being brought before a court, he can no longer make that claim.
In summary, the concept of statute of limitations has no validity in halachah — neither as a function of mechilah (forgiveness of a loan), yi’ush, or due to local civil law. (The lone case in which a loan could expire is if shemittah passed and the lender did not arrange a pruzbul.) Nevertheless, when adjudicating such a case, beis din should investigate why the lender did not attempt to collect the loan earlier and ensure that he has a plausible explanation for the delay. [If the lender received a check from the borrower and never deposited it, and he now wants to collect the loan, the borrower likely has a valid claim if he says that he repaid the loan and he left that check with the lender only because he knew that it could no longer be deposited anyway (see Choshen Mishpat 69:2).]