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State statutes of limitation for credit card debt

Collectors have a limited time to file lawsuits over unpaid card debts

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CreditCards.com compiled this state-by-state listing of credit card debt collection statutes of limitations. Click on a state; more information will appear below the map. See notes and explanations.

Notes:

  • The chart shows the time limit on revolving credit accounts such as credit card agreements. Most state laws and codes do not refer specifically to "credit cards" or "credit card agreements." Instead, the statutes tend to use general terms such as "written contracts" or "open accounts." State laws are subject to change. 
  • Judges deciding specific cases may interpret state laws differently; those court rulings may then be overturned. Judges also may rule on which state's law should apply -- the one where the consumer resides, or where the card issuer is located. 
  • While the federal Truth In Lending Act defines credit cards as "open-end credit plans," that's irrelevant to the discussion of state statutes of limitation. State laws are concerned with contracts and agreements, and how long they may be enforced. 
  • The most recent full update of the chart was in March 2013, with minor updates in October 2013 and May 2014. Write to Editors@CreditCards.com to report updates or corrections.
  • See "How to tell when credit card debt legallly expires" for tips on sorting out whether your debt is too old to be legally collectible.

What a statute of limitations is, how it works
Creditors and debt collectors have a limited time window in which to sue debtors for nonpayment of credit card bills. That limit is set by a state's statute of limitations. These laws exist to protect people from claims being brought after evidence has disappeared. Anyone with unpaid credit card debt should know their state's statute.

"In most states, the statute of limitations period on debts is between three and 10 years; in some states, the period is longer," according to the U.S. Federal Trade Commission (FTC). Debts that have lingered longer than the statutes allow are often referred to as "time-barred debts."

Time-barred debt
"If a debt collector sues you to collect a time-barred debt, you can have the suit dismissed by letting the court or judge know the debt is, indeed, time-barred," according to the FTC.

Debt collectors and consumer advocates, however, caution that the statute of limitations (SOL) does not prevent debt collectors from attempting to collect on debts. They just cannot successfully sue to collect the debts -- assuming the debtor shows up in court to assert his or her rights.

Debt doesn't go away just because it goes beyond a time threshold.

-- Mark Schiffman, ACA International

"Debt doesn't go away just because it goes beyond a time threshold," said Mark Schiffman, vice president of public affairs at ACA International, the collection industry's largest trade group.

Mary Spector, an associate law professor at Southern Methodist University's Dedman School of Law in Dallas, says many consumers ignore court notices about old debts and end up losing cases that might otherwise be thrown out of court because the statute of limitations has run out.

"In Texas, it's usually up to the defendant to show that the debt is time-barred under the statute of limitations," Spector says. Her advice: Don't ignore the court papers and get a consumer lawyer to represent you.

Court rulings may take precedence
To construct the map above, CreditCards.com examined statutes and judicial opinions and consulted legal experts to cover all 50 states and the District of Columbia. In most states, the statute of limitation is clear. In some, however, we could find no definitive answer because of ambiguities in state law or conflicts between the law and court rulings.

The uncertainty over when credit card debt expires arises because state laws governing contracts are interpreted by the courts when they are applied to individual circumstances, and those interpretations may change over time.

That was the case in Georgia in January 2008, when a Georgia Court of Appeals ruled (in Hill v. American Express) that the statute of limitations on an unpaid credit card debt was six years. The Georgia code sets the limit on open-ended accounts at four years, but the appeals court applied the law for written contracts to card debt in this case. Another 2008 Court of Appeals ruling (in Phoenix Recovery Group, Inc. v. Mehta) affirmed the Hill ruling and settled the law in the state, according to the Georgia Department of Law.

In other states, it remains difficult to predict how courts will rule when faced with a question about expiring credit card debt. Kentucky specifies a five-year expiration period for oral contracts and 15 years for written contracts. The period that will apply to card debt is unclear; some courts in other states have held that credit card agreements, because they can be changed unilaterally by the card issuer, do not qualify as written contracts. Legal experts said they are unaware of precedent-setting rulings within Kentucky on the question, leaving courts to weigh the circumstances and documents of each case individually.

CREDIT CARD DEBT:
WHICH STATE LAW APPLIES?
Nearly all of the top credit card issuers name the state whose laws should apply to their card agreements. Here's what they say:
Issuer State Years credit card debt is collectible in court
American Express Utah 4
Chase Delaware 3
Bank of America Delaware 3
Citi South Dakota 6
Capital One Virginia* 3
Discover Delaware 3
US Bank ** **
Wells Fargo South Dakota 6
USAA Nevada 4
Barclays Delaware 3

*Capital One says Virginia law rules, unless the cardholder's state has a longer statute.

**US Bank's terms and conditions agreement specifies which state law should apply to arbitration, but not for other matters, such as unpaid debt.

Federal law
The Fair Debt Collection Practices Act, the federal law that governs how and when debt collectors can contact consumers and collect on unpaid bills, dictates where legal action on debts can be filed. According to Section 811 of the law, debt collectors may file suit in the jurisdiction where the "consumer signed the contract" or where the consumer lives.

Some credit card agreements may stipulate that the laws governing the home state of the issuer, not the consumer, determine the terms and major provisions of the contract. That means that if the credit card holder lives in Maine, but the issuer is based in Delaware, the Delaware statute of limitations may apply.

Do not confuse the statute of limitations with the length of time that a debt may remain on a credit report. A bankruptcy, for instance, will remain on a credit report for 10 years regardless of the statute of limitations. If a creditor successfully wins a judgment for payment of a debt, that information can remain on a credit report for seven years.

When does the clock start to tick? It may vary by state, but generally the statute of limitations begins when a credit card account becomes delinquent -- the date of the last payment. However, in some states the clock begins to tick six months after the last payment. To determine the deadline to file suit on the debt, add the number of years of the statute of limitations to the start time.

Re-aging debt
Consumers should be aware of a practice called re-aging of old debts. The clock on the statute of limitations may start anew if a consumer makes a payment -- even a small amount -- on a debt that has exceeded or is approaching the end of the statute of limitations. Acknowledging an old debt may also extend the time limit on potential debt collection lawsuits. Consumer advocates now advise debtors not to acknowledge old debts or debts they don't recognize as their own to avoid inadvertently resetting the clock on the statute of limitations.

Any new activity on it could re-age it and make it more collectable.

-- Lauren Saunders
National Consumer Law Center

"Any new activity on it could re-age it  and make it more collectable," says Lauren Saunders, managing attorney for the National Consumer Law Center, a consumer rights group. "You're better off ignoring a call about an ancient debt. It's best to send them a letter saying I don't recognize this or please verify it."

See related: Court judgments for debt: Your options after the gavel, Debt collection sample letters, 10 tips for dealing with debt collection, collectors, 5 federal laws that protect consumers

Updated: May 19, 2014


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