Q&A: Can I be sued over card debt beyond the statute of limitations?

The Credit Guy columnist Todd Ossenfort
Todd Ossenfort has been chief operating officer for Pioneer Credit Counseling since 1998. He writes our weekly "The Credit Guy" column, answering reader questions about credit counseling and debt issues.

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Dear Credit Guy
I defaulted on a GE Walmart credit card in 2012 and was recently contacted by a third party who is also calling other family members and wants to place a lien on my house. Is all this legal in California? – Anita


Dear Anita,
Although I am not an attorney and cannot give you legal advice, I think this may be a last-ditch attempt by the collector to get you to pay.

The statute of limitations on credit card debt in California is four years. This means that lenders cannot sue debtors in an attempt to collect on unsecured debt, like credit card debt, that is more than four years past due. You should have reached that mark sometime in 2016, depending on when the account went into default and assuming you have not made any payments since that time.

Under the Fair Debt Collections Practices Act, a collector:

  • Can only contact other persons (like family members) to determine your address, phone number and where you work.
  • Cannot discuss your debt with anyone other than you, your spouse or your attorney. They are also generally prohibited from contacting a third party more than once.

Steps to follow if you are sued over old debt
As for placing a lien on your home, you should know that this is not a simple process.

  • You would first have to be sued and lose, which could result in a judgment lien against you that would have to be recorded.
  • In order to actually get any money from you, the property would have to be sold, which would require another court order.
  • All of this takes time and money that a third-party collector would probably not pursue.

If they do pursue this, however, you need to know that ignoring a court summons is never a good idea.

  • If you don’t show up, you will lose.
  • If you have been summoned, you will need to appear in court and state your case that this debt is beyond the statute of limitations in California.
  • I would definitely recommend you seek the help of an attorney if it goes this far.

Dealing with the debt
Even though this debt may now be uncollectable, you do still owe it and it will still show up on your credit report and affect your score for several more years.

You are the only one who can decide if you want to try to pay back the debt. You need to know that making any kind of payment can re-age the debt, restarting the clock on the statute of limitations. A call to an attorney and/or a nonprofit credit counseling organization can help you with this decision. The Federal Trade Commission lists qualified credit counseling agencies.

Take care of your credit!

See related: 8 things debt collectors may not doState statutes of limitations for credit card debt, Don't restart the clock on expired debts

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Updated: 11-24-2017