What is the Statute of Limitations for Credit Card Debt?

There is a statute of limitation for credit card debt that prevents your creditor from suing you in court for debt that is very old. The statute is set on the state level, and each state has its own laws and court precedent that will dictate the terms of your pre-existing debt. However, there are some things to be aware of across states.

Average Statue of Limitations

On average, the statute of limitations on credit card debt ranges from 4 to 6 years. There are a handful of states that set the limit at three years. Those include:

  • Alaska
  • Arizona
  • Oklahoma
  • Louisiana
  • Mississippi
  • South Carolina
  • North Carolina
  • Virginia

In addition, there are a few states that set the limit over 6 years. Montana, Wyoming and Illinois all have limits of 7 years or more. If you are being sued for an outstanding credit card debt from more than three years ago, it is worth your time to check the statute in your state to determine if the collector has a right to carry on with with law suit.

Federal Protections

The Fair Debt Collections Practices Act sets regulations on when and how a collector can attempt to recover debt from you. You should know that not all collections agencies have a legal right to attempt to recover on behalf of your creditors. Instead, you have a right to check the contract you had with your original debtors to determine if this practice is permitted. You can also request the collections agency verify the debt in writing to you. While they are processing this request, they are not permitted to make attempts to collect. As recently as 2009, credit card companies also may not raise interest rates on debt you have already incurred according to federal law.

Time-Barred and Re-Aging Debt

There are a few terms you should be familiar with if a credit card company is attempting to collect old debt from you. First, if the debt is past the statute of limitations, it is called "time-barred" debt. When you speak with a lawyer about the collections attempt, your lawyer may use this term. You should be seeking to confirm if the debt is "time-barred." Even so, there may be some provisions allowing a collector to sue in a civil court. While statutes of limitations are enforceable as law, legal precedent may exist to allow your creditor to make an attempt to recover.

Re-aging is one method a creditor may use in order to extend the statute of limitations on your credit card debt. If you make a payment on debt, the process of aging the debt may start all over again. This depends partially on the terms of your contract and partially on the laws of your state. If you are hoping to have your debt forgiven by allowing it to expire under the statute of limitations in your state, however, you should cease making payments on the debt. By making a payment, you are essentially acknowledging the creditor has a continued right to the funds. Nonetheless, waiting for debt to expire will not totally excuse you of negative consequences. It will affect your credit score and ability to get a credit card in the future.

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