If the creditor buys the debt for say 20 cents on the dollar. Can they actually sue you for the full amount of the outstanding debt?

If they bought say a $20,000 dollar debt for $4,000 in what total amount are they legally allowed to sue you for?

They can sue for the full 20,000. They own the debt.

The older the debt, and the less chance of collection, the cheaper it sells for.
Sometimes it will sell for 10 cents on the dollar. But they can and do try to collect the full amount. This is a common practice.

What they pay for the debt has nothing to do with it at all.

Your post title asks a different question than your body. Generally the SOL starts with the last transaction activity on the account. Either a payment or charge.

Why would you think what a creditor paid for the debt limits what they can sue for? Why would people buy debt if they couldn't collect the full amount. The fact that a debt was sold for less than its face value has no bearing on the amount of the debt or what they can sue for. With interest and fees, the amount can sometimes double and triple.

However, if the creditor paid a fraction of the face value of the debt, they would be more inclined to settle for a lesser amount rather than go to court.