Credit Card Statute Of Limitations

The credit card statute of limitations is the term for a period within which a debt collector or creditor is allowed to pursue a debt.
 

   
After this period expires, credit card companies can no longer do anything, not even file a lawsuit, to collect what you owe them.

How long does it last? The credit card statute of limitations differs every state. The average period for open accounts or written contracts (i.e. credit cards) is 6 years. The shortest period for the credit card statute of limitations is 3 years. Debts in states like Alabama, Alaska, Arizona, Virginia, Oklahoma, Vermont, New Hampshire, Louisiana, Mississippi, D.C., Maryland, and North and South Carolina are all limited to 3 years. In Texas, New Mexico, Utah, Nevada, California, Pennsylvania, Nebraska, and Georgia, the statute of limitations is within 4 years. In Florida, Kentucky, Arkansas, West Virginia, Illinois, Missouri, Kansas, and Idaho, it is within 5 years. In Hawaii, Colorado, New York, New Jersey, Washington, Oregon, Minnesota, Wisconsin, Michigan, Indian, Ohio, Maine, Massachusetts, Delaware, Connecticut, Rhode Island, Tennessee, and North and South Dakota, it’s 6 years. Only Wyoming, Iowa, and Montana give as long as 7 years.

When does the credit card statute of limitations start? Technically, it depends on the type of agreement you have with your credit card company. It usually begins when you do something contrary to the agreement, such as failing to make payments. They start counting from the card’s last date of activity or last date of payment. However, in some credit card agreements, an acceleration clause is included. This means that for the credit card statute of limitations to start running, the company needs to send a demand letter for you to pay by a certain date. The credit card statute of limitations will only kick-in if and only if you fail to pay by the letter’s due date.

When does the credit card statute of limitations end? If your credit card agreement does not include an acceleration clause, you can start from that date of your last card activity or payment. For example, you live in California and have last used your credit card in February 15, 2010. Since your agreement does not include an acceleration clause, you can only be safe from a lawsuit on February 15, 2014. If you have an acceleration clause in the agreement, you can start your calculation from the date the company has sent the demand letter.

You need to verify your state’s credit card statute of limitations to know when you are free from old debt and to prevent exploitation from debt collectors and credit card companies.


  

Source: Credit Cards For People With Bad Credit Rating


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