Statute of Limitations on Debt Collection for a Credit Card in Georgia

A debt collector in Georgia faces a deadline for using the courts to enforce the debt, called the statute of limitations. The time limit set by the statute of limitations is specified in the Georgia Code and varies depending on how the debt was incurred. Prior to 2008, the applicable statute of limitations for credit card debt was uncertain due to variations among parts of the Georgia Code; however, rulings by the Georgia courts in 2008 indicate the limitation period for credit card debt is six years.

Georgia Code

The uncertainty regarding the statute of limitations for credit card debts stemmed from the different limitation period for debts based on "open accounts" and "simple contracts." Georgia Code section 9-3-25 states that the limitation period for debts based on an open account, as well as "contracts not under hand," is four years. The reference to "under hand" means the signature of the party against whom the contract is being enforced. In contrast to this section, Georgia Code section 9-3-24 specifies a six-year limitation period for "simple contracts in writing." This latter code section with a longer limitation period is more beneficial to a debt collector, while the former code section, with a shorter limitation period, favors a debtor.

Case Law

The issue of whether the four- or six-year limitation period applied to credit card debts was addressed by the Georgia Court of Appeal in 2008. The debtor stated that the credit card debt was an open account and that he never signed a contract with the credit card company; therefore, the four-year limitation period applied. The court disagreed and held that a credit card debt under Georgia is a simple contract, not an open account; therefore the six-year limitation period applied. In 2008, the Georgia Court of Appeal also held that the six-year limitation period applied to store-issued charge card accounts.

Judgments

If the debt collector files a lawsuit within the statute of limitations and has the evidence to prove the credit card debt in court, a judgment is made by the court against the debtor. Although the limitation period for filing the lawsuit no longer applies, a new limitation period affects the debt collector's right to enforce the judgment. Georgia Code section 9-12-60 states that a judgment becomes dormant after seven years if no action is taken to enforce it. After the seven-year period expires, the debt collector has three years to apply to the court to revive the judgment. If the three-year period lapses without any action taken, the judgment cannot be enforced against the debtor.

Reviving the Statute

Credit card debt that is expired under the Georgia statute of limitations can be revived. A debt collector is not prevented by any state or federal law from contacting a debtor regarding payment on an expired debt. Such contact may involve sending a letter to the debtor requesting information to confirm the amount and basis for the debt. If the debtor were to reply in writing with the details of the debt, this may cause the statute to be revived and the six-year limitation period will begin again.