Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Feb 20, 2013

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Unless otherwise noted in a credit card agreement, a credit card issuer can sue at anytime once an account becomes delinquent. Although as a practical matter, most credit card issuers do not start legal proceedings until an account is charged off. A charged off account is one that has been removed from the creditor’s records as a receivable or collectible debt. This is an accounting maneuver only and the debtor still owes on the debt.

A charge off typically takes 90 days to 6 months or more to complete following the initial delinquency. Once the charge off is complete, it can take anywhere from a few weeks to years for a creditor to sue a debtor, if at all. In some cases, the creditor will sell the debt to a collection agency. A collection agency may or may not sue.

Statute of Limitations Protection

Even if a creditor or third-party collector attempts to sue on a delinquent credit card account, a debtor is still afforded certain protections under the law. One such protection is the statute of limitations. The limitation period refers to the amount of time a creditor has to bring a lawsuit. Each state has its own statute of limitations for various types of legal actions. In general, statutes of limitations range from 3 to 7 years for the collection of credit card debt. This means, a creditor or collection agency has a certain amount of time, as allowed by law in the debtor’s home state, in which to sue after the last activity on the account. After that time, no suit can be brought.

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Negotiating & Planning Payments

It is important to note that if the debtor makes a partial payment or payments, or even if the debtor agrees to make payments, this can start the statute of limitations all over again. As a result, debtors should be careful how they proceed when, or if, they speak to a creditor or collection agency. When negotiating some form of repayment plan or lump sum discount, the debtor needs to be sure that such a plan or discount payment is feasible.

If a Judgment Is Obtained

Finally, if a judgment is obtained, a creditor can garnish a portion of a debtor’s wages, seize funds in their bank accounts, and attach other personal (non-exempt) property.