How is the statute of limitations on credit card debt determined?

UPDATED: Jan 14, 2012

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How is the statute of limitations on credit card debt determined?

About 5 years ago, we hired a credit settlement company for the 4 credit cards we have. We were able to negotiate on 2 of them and pay those, but we have been unable to pay the last 2. The statute of limitations in our state is 4 years for credit cards so we have met that criteria but a collection agency for one credit card is starting to call to collect but we are still unable to pay. I read that if you have no contact with the creditor within the statute of limitations and they cannot collect on a lawsuit. However, through the credit settlement company in the last 4 years, the collection agency has given us offers that we could not pay so we counter offered. Can that still be considered contact with the creditor within the statue of limitations in which they can still sue us?

Asked on January 14, 2012 under Bankruptcy Law, Nebraska


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

The statute of limitations has nothing to do with contact or communication; it is based on the time since the default or other act which gave rise to a legal claim. For credit card debt, that is typically counted from when first went into default on the cards--that is, when you first did not pay (at least make the minimum payment) on time.

Two caveats--

1) If after you defaulted the first time, you started paying, then defaulted again, the SOL starts running again from the later default.

2) If you entered into a payment plan or agreement then breached it, the SOL runs from the breach.

Again, it runs from when you did the act giving rise to the right to sue you, not from when yo talked to, etc. the creditor or its collections agent.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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