Colorado Statute of Limitations on Credit Card Debts

Colorado places some limits on how creditors and debt collectors pursue residents to collect old credit card debts. The state restricts the length of time that consumers can be subjected to legal action over credit card debts. Yet, Colorado laws don't erase any debts that residents may owe their creditors.

Colorado Statute

The statute of limitations on credit card debt is the amount of time that a card issuer has to take legal action against consumers to collect unpaid debts. That legal action includes filing a lawsuit to collect the debt or garnishing a person's wages. Wage garnishment requires a court order, which allows an employer to withhold a specific amount of a worker's wages as repayment for a credit card debt. In Colorado, the statute of limitations on credit card debt is six years. Therefore, a card issuer can't legally sue a Colorado resident to collect credit card debt that's more than six years old.

Federal Law

Any creditor or debt collector who threatens to sue a Colorado resident or any other consumer to collect credit card debt after the statute of limitations has expired is violating the U.S. Fair Debt Collection Practices Act. However, consumers still owe credit card debts they haven't paid even if they can't be sued by a company to collect the debt. The only exceptions to that are when debts are erased because they've been forgiven by the credit card company or discharged by a bankruptcy court.

Restarting the Statute

The MSN Money website recommends that people avoid acknowledging that a credit card debt is theirs or promising to make payments if they can't pay a debt in full. That's because people who make a payment or agree to a repayment plan may restart the statute of limitations if it has expired. That would allow a collection agency to continue to pursue full payment of the debt and file a lawsuit to collect it.

Handling Collectors

Colorado residents need to know when they last made a payment on a credit card debt and when they last charged a purchase to the card in question. The six-year state statute of limitations is based on the latest date that a payment or charge was made to the card. People who are sure the statute has expired on a credit card debt in collection can send the collection company a letter to tell the company to stop contacting them. The company essentially has no further recourse, since a lawsuit can't be filed. Nonetheless, you may want to consult with an attorney to ensure you handle the situation correctly because some debt collectors look for loopholes in the law to continue collection efforts.