Statute Of Limitations For Credit Card Debt[yoast-breadcrumb]
Statute of Limitations for Credit Card Debt – What You Need to Know
If you’re struggling with old credit card debt, you may be wondering if the debt is still legally enforceable. Well, credit card debt has a statute of limitations, which means debt collectors can’t sue you after a certain period of time. The statute of limitations varies by state, but is usually between 3-6 years. But just because the statute of limitations has expired doesn’t mean the debt magically goes away. Let’s break it down so you fully understand your rights when it comes to old credit card debt.
What is the statute of limitations on credit card debt?
The statute of limitations sets a time limit for when a creditor or debt collector can sue you to collect on a debt. This time limit varies by state. For credit card debt, it ranges from 3 years to 6 years after your last payment or the last account activity. You can check out this table to see the statute of limitations by state:
So for example, if you live in Colorado and defaulted on a credit card 5 years ago, the statute of limitations has passed. The credit card company can’t sue you, but that doesn’t erase the debt – more on that next.
What happens when the statute of limitations runs out?
Once the statute of limitations clock runs out, the creditor loses the ability to sue you for the debt. But that doesn’t mean the debt magically disappears! The creditor or collection agency can still attempt to collect on the debt through calls, letters, or other means (more on dealing with collectors later).
Also, even though the creditor can’t sue you, the debt can remain on your credit report for up to 7 years from the date you first missed a payment. This can still negatively impact your credit score. You may want to consult a credit repair company to get it removed.
Can I be sued for old credit card debt past the statute of limitations?
If the statute of limitations has expired, you generally can’t be sued for the debt. But there are some important caveats:
- The statute of limitations clock starts ticking from your last payment or account activity. Any payment towards the debt can “revive” the statute of limitations.
- If you move to another state, the statute of limitations may change or restart.
- The creditor could still try suing you, hoping you don’t understand your rights. Make sure to respond within the required timeframe.
Bottom line – don’t ignore legal notices about credit card debt, even if you think the statute of limitations has expired. Consult a lawyer to understand your rights and the best path forward.
What should I do about old credit card debt in collections?
If you have old credit card debt that’s gone into collections, here are some tips:
- Ask the collector to validate the debt – they have to prove you actually owe it.
- Don’t make any payments – this can revive the statute of limitations.
- Keep records of all communication.
- Send a debt validation letter if you’re sure the statute of limitations has passed.
- Consult a credit counselor or lawyer about your options.
Don’t let collectors intimidate you into paying expired debt! Politely stand your ground and seek help understanding your rights.
Should I pay old credit card debt if I’m sued?
If you get sued over credit card debt where the statute of limitations has expired, don’t panic. Take these steps:
- Respond to the lawsuit within the required timeframe – usually 20-30 days.
- State the statute of limitations defense in your written response.
- Provide evidence like your last payment date.
- Show up in court on your hearing date.
- Politely explain the statute of limitations situation to the judge.
With the statute of limitations on your side, you have a strong case to get the lawsuit dismissed. The creditor may try to pressure you to pay, but stand firm and don’t fall for it.
When does credit card debt go away?
There’s no magic date when credit card debt totally disappears. The statute of limitations prevents lawsuits, but doesn’t erase the debt. Even after the 7-year credit reporting period, the collector or creditor could still come after you for payments (although it’s unlikely).
That’s why the best option is to be proactive. Work out a payment plan, settle for less than you owe, or consider credit counseling to handle old credit card debt. This will give you peace of mind and prevent hassles down the road.
We hope this breakdown helps you better understand your rights and options when it comes to old credit card debt. Don’t let collectors pressure or intimidate you – you have defenses! Seek help from a credit counselor or lawyer if you need guidance tackling credit card debt.