Statute of Limitations

Each state within the United States has different laws regarding statute of limitations for collecting credit card debts. The statute of limitation for collecting debt on a credit card is the period of time that credit card companies have to file a lawsuit against a person that has not paid off a credit card debt. If the period of time passes, the credit card company cannot file a lawsuit against the person with the debt to collect on the debt. The length of time for a statute of limitations for credit card debt is determined by the last payment date on the card or the last activity date (the last time the card was used). The Fair Debt Collection Practices Act was created to prevent debt collectors from harassing people that owe a company money past the statute of limitation.

There are four types of debt payment agreements available to consumers today; an oral contract, a written contract, a promissory note and open-ended accounts. Each state has a different statute of limitations for credit card debt and the state that a person that owes debt should use when determining their statute of limitation is the state in which they currently reside. An oral contract is defined as a person agreeing verbally to pay someone money that they owe. An oral contract is legally binding but it is very difficult to prove in a court of law. A written contract is defined as the agreement to pay on a loan under the terms of written in a document which the person in debt and the debtor have signed.

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A promissory note is defined as an agreement to pay on a loan via a written contract and the interest rates and the payment plans are defined in a promissory note. For example, a mortgage is a form of a promissory note. Open-ended accounts are defined as revolving lines of credit that have varying balances. The best example of an open-ended account is a credit card account. The statute of limitations for each of the four types of debt payment agreements varies from state to state and from type to type.

A statue of limitations for the collection of credit card debt by a credit card company can be extended in the following states with a new written promise to pay:

• Arizona
• California
• Florida
• Iowa
• Kansas
• Maine
• Massachusetts
• Michigan
• Minnesota
• Mississippi
• Missouri
• Nevada
• New York
• Texas
• Virginia
• West Virginia
• Wisconsin

The longest length of time for a statute of limitations for a credit card company to collect debt owed to them is a total of 15 years. This statute of limitations is for written contracts and promissory notes in the state of Kentucky, written contracts and promissory notes in the state of Ohio, and oral agreements and written contracts in the state of Rhode Island. The next longest statute of limitations is 10 years and a handful of states employ the 10 years for the statute of limitations for oral agreements, written contracts, promissory notes and open-ended accounts. Time limits are also specified in the Fair Credit Reporting Act for the reporting of out of state debts. Anyone that owes money to a credit card company should give in to the harassing letters and phone calls by the credit card company. Consult an attorney before paying the debt to the credit card company because the case might have already passed the allotted time from the statute of limitations for that specific state. An attorney will be able to answer any and all questions regarding a statute of limitations.

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