As of June 30, 2010, American consumers are delinquent on $1.3 trillion dollars of consumer debt. The statute of limitations on debt collection varies from state to state. An Illinois appellate court decision decided the time limit for Illinois consumers.
Contract
The statute of limitations on collection of debt is based on whether the debt is considered an oral or written contract. Each has a different statute of limitations. In Illinois, credit cards are considered to be oral contracts.
Case Law
In 2009, the Illinois Appellate Court heard the case of Portfoliio Acquisitions LLC v Feltman in which the defendant argued that credit cards did not fit the legal definition or structure of written contracts and therefore should be subject to the statute of limitations of oral contracts. Feldman won.
Oral Contracts
In Illinois, an oral contract is subject to a five-year statute of limitations. Once the debt reaches the five-year limit it is time-barred debt and you can no longer be sued.
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