How to tell when card debt legally expires
How can you tell when a credit card debt will legally expire?
The statute of limitations in your state is a starting point
to tell if a debt is too old to be dragged in front of a judge. However, the law falls short of predicting
what will happen if you do wind up in court, where decisions are made on a case-by-case
Here is a checklist to help tell if a debt can no longer be
the basis of a collection lawsuit, based on interviews with legal experts and a
review of cases.
The law in your state
Statutes of limitation don't usually deal specifically with card debt. About half of states divide debt into categories, with different expiration
periods depending on whether a debt qualifies as an open account, written
contract, or informal "oral" contract. Check the statutes of limitations map for the
applicable period, based on the statute and prevailing case law.
Your card agreement
Language in your card agreement may call for the law of the card issuer's
home state to be applied. Usually the
court in your state will use its own laws, but not necessarily. If you don't have a copy of the card
agreement, check the credit card agreement database on file at the Consumer Financial
Protection Bureau from about 300 card issuers. You can also request your agreement from the issuer; federal law requires the issuer to provide it on your request.
If sued, lawyer up
Consumers who take a do-it-yourself approach to statute of limitations cases tend
to do poorly in court. The National
Association of Consumer Advocates can direct you to consumer lawyers in most
Once a debt is too old for court action, collectors can still call you seeking
payment, but they cannot threaten lawsuits without running afoul of the Fair
Debt Collection Practices Act. You also have the right to stop the calls by
sending the collector a "cease-communication letter." If a collector sues or threatens to sue for an expired debt, you have grounds for an action under the FDCPA.
See related: Know your rights under the Fair Debt Collection Practices Act, Expiration dates fuzzy on old card debt
Published: March 22, 2013