All states have statute of limitations on collecting credit card debt. The statutes, which vary from state to state, regulate how long debt collectors have to win court judgments for delinquent credit card debt. Credit and debt website BCS Alliance reports that the statute of limitations on credit cards in Alabama is three years, six years in Maine, eight in Wyoming and 10 in Rhode Island. On average, debt collectors have about six years to use the court system to collect credit card debts.
Misconceptions
Credit card debts never expire. The debts are valid until you pay them in full. BCS Alliance reports that states created statute of limitation laws to offer people a certain degree of protection from old debts. Without the laws a debt collector could win a court judgment for a debt 30 years old, for example. The laws do not stop debt collectors from filing lawsuits, however. Statute of limitations laws are available as a suitable defense in a lawsuit, but cannot prevent the filing of a suit. A 2010 article in "The New York Times" reports that a man sued for an old debt won a case after sending a note to the judge indicating that the debt was too old for review by the court.
Considerations
The clock on the statute of limitation laws usually begins with the date of the last activity on the account, such as a payment, or the date the account closed and the creditor charged off the balance. Debt collectors sometimes attempt to reset the statute of limitations by soliciting a small payment against the account. The date of that payment becomes the most recent activity, and a fresh statute of limitations period begins.
Options
Debt beyond statute of limitation guidelines is "time-barred" from enforcement by the courts, according to BCS Alliance. Lawsuits and the threat of court judgments or bank garnishment are the biggest weapons debt collectors have. Some people who know that their debts are time-barred simply refuse to pay because a successful lawsuit is impossible if they defend themselves. Monetary judgments are possible if a person sued does not appear in court or fails to respond to the lawsuit in writing. Judges issue default judgments against people who do not contest lawsuits.
Credit
Statute of limitation laws do not directly affect credit. Negative information on credit reports, such as defaulted credit card accounts, appear for seven years, according to the Federal Trade Commission. Some people may choose not to pay a credit card debt that is no longer appearing on credit reports and is time-barred for court action. Debt collectors may still attempt to collect the debt by calling and sending statements, however.
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