What is a Statute of Limitations anyway? You need to know what that is whenever a creditor sues for an unpaid balance on a credit card.
The Statute of Limitations is a law, which varies from state to state. What that law says is how much time a creditor, such as a credit card company, has to sue to collect that credit card debt. The statute of limitations protects debtors from creditors waiting forever to sue. Creditors do not have unlimited time in which to sue. After a certain point in time, the law says, such collection actions are forbidden. The law will also state what event starts the running of the statute of limitations.
So, the first thing to determine in defending yourself against credit card debt is to find out what your particular state’s law says. Each state has its own specific statute of limitations for debt collection actions. That law tells what the time limit is for a lawsuit, and also will state when that time limit starts to run. In some states, a creditor has four years; in other states, it can be as long as six years, while in other states, it could be as little as two years. It could be from the date of the last charge on the account, from the date of default in payment, or whatever criteria your particular state defines in the law.
If, for example, you live in a state that has a four year statute of limitations and you stopped paying four and a half years ago, you may well have a complete defense to nonpayment of the bill, arguing that the creditor waited too long to sue on that debt, and therefore, the creditor has no right to collect it. In other states, if the statute of limitations period is shorter, and depending on the facts, you may have a complete defense, a defense to some of the charges, or no defense.
Bill collectors are very adept at getting people to admit they owe the money. Whenever a collection agency calls, do not agree to pay anything on the debt or even agree that the debt is indeed owed. In some states, a payment or even a simple agreement may well act to revive the running of the statute of limitations time period even if it has already run!
Don’t try to negotiate repayment terms or a reduction in the amount owed on your own. Unsophisticated borrowers, and most people are, need help to avoid collection agency minefields. You need guidance to defend yourself. Credit card debt services know the applicable state laws and will help you navigate this uneven playing field to your best advantage.
