If you've fallen behind on credit card payments in Kentucky, you should know that the state limits how long a creditor has to sue you to recover the unpaid debt. These limits, known as statutes of limitations, apply to various kinds of debts Kentucky residents incur, including credit card debts. Talk to a Kentucky attorney if you need legal advice about the state's statutes of limitations and credit card lawsuits.
Open Accounts
For the purposes of a statute of limitations, credit cards are generally considered an "open account." This means that the borrower can continue to borrow money from the creditor on an ongoing basis and does not have a set amount of time in which to pay back the loan. Kentucky's statute of limitations on open accounts is five years, according to Kentucky Revised Statutes section 413.130.
Time Frame
Kentucky's statute of limitations starts "ticking" as soon as you fall behind on your credit card payments, not when you open your account. For example, if you opened a credit card 10 years ago and have never missed a payment, your creditor is not out of luck even though the five-year statute of limitations limits open accounts. If you fail to make a payment, your card issuer has five years from that date in which to sue you regardless of how long you've had your credit card.
Judgments
Kentucky has a statute of limitations that not only governs how long a creditor has to sue you for a defaulted credit card, but also one that governs how long the creditor has to collect the money if it sues you and wins. If the card company wins a lawsuit against you, the court grants it a judgment. After this, the creditor has 15 years to collect on the judgment debt, according to Kentucky Revised Statutes section 413.090.
Agreement Terms
When you choose to apply for and accept a credit card from a lender, that card comes with terms and conditions contained within the credit card agreement. The card agreement usually contains a specific kind of clause known as a "choice of law" provision. With this clause, your credit card company typically chooses a state's law other than Kentucky's that will apply to the agreement. Usually, card companies select a state that has laws more favorable to its desires, such as a state in which the statutes of limitations are much longer.
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