Debt Relief: Statute of Limitations on Credit Card Debt

If you’re looking for debt relief during tough economic times, you need to know the statute of limitations on credit card debt in your state.  Each state maintains its own statute of limitations for the nonpayment of credit card debt, i.e., a limited time frame within which individuals can be sued for failure to pay their bills.  According to the U.S. Federal Trade Commission (FTC), most states’ limitation periods range from three to 10 years.   

The Statute of Limitations on Debt

Typically, the statute of limitations on credit card debt begins once the account becomes delinquent, which is the last date of payment, but some states begin tracking six months after the last payment.  The deadline by which a creditor must file a law suit is equivalent to the number of years of the statute of limitations in the state added to the date that the statute of limitations began. 

The Fair Debt Collection Practices Act regulates how and when credit card collectors can contact consumers to collect past-due bills, and it also regulates where legal action on debts can be filed.  According to the Act, collectors are restricted to filing only in either the jurisdiction where the “consumer signed the contract” or where the consumer lives (Section 811). 

Credit card debt that is older than the statute of limitations is called time-barred debt. 

  • It’s important to realize that some creditors may still try to collect on these kinds of past due bills.
  • Many will request that payments be made toward old balances, and consumer advocates clearly state that this is not illegal. 
  • Collectors may see it as their only way to recoup losses, particularly since individuals can’t be sued for time-barred debts and because there is no legal recourse that creditors can take against them for these old bills. 
  • In fact, the FTC advises consumers that if you are sued by a debt collector who is attempting to collect old or time-barred debt, you should tell the judge the debt is time barred and request to have the lawsuit dismissed.

What consumers must be wary of, nevertheless, is re-aging their old debt.  If an individual pays credit card bills that have exceeded the statute of limitations, the countdown to the statute of limitations will begin anew.  Since that could open the door to potential lawsuits, the national Consumer Law Center suggests that individuals send a letter that either states that the debt it unrecognizable or requests that the debt be verified. 

Although it’s always advisable to pay off credit that was issued in good faith, the statute of limitations on credit card debt is quite clear on the rights of the creditor and the consumer.  Despite the fact that credit card companies expect compliance with payment dates and amounts, individuals can’t be forced to pay old bills that fall outside of the statute of limitations and have the right not to fulfill their promise to pay.

Getting Help

If you have older debt and want to ensure you do not accidentally do anything to re-start the statute of limitations, you should consult with an experienced attorney to find out what the rules are in your state. Your attorney can also help you put a stop to collections on time-barred debt by taking action against any creditor who is behaving in violation of the law.

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