Every case has its own time limit in which it can be pursued through the court. For debt cases, it is done to shield debtors from lending company legally. This time limit length varies according to the debt case. Knowledge about statute of limitations on credit card debt is very important nowadays.
The Limitations Applied on the Credit Card Debt
In fact, the debt in credit card is quiet prevalent in United States. Each household that has credit card account owes an average of $16,061 to their credit card company. No wonder many Americans struggle to make their monthly payments, some even defaulting on their debts after a while.
Each type of debt has different time limit. Mortgage loans, credit cards, and student loans will have diverse regulations. The limitation of debt is also determined by state law, so each state will vary in its length. It can run from four to six years, possibly even more. If you are not sure about length of legal time period on your debt case, it is better to look up the state law applied on where you reside.
Borrower whose debt has passed its legal period can no longer be sued in front of the court to extort payment by their credit card company. However, the company is still able to contest that time limit. In that case, borrower is demanded to prove that their debt has surpassed its legal time limit. Credit Card Company may have different perspective on when time period to legally pursue payment starts. When facing this kind of situation, seeking for professional legal aid is highly recommended.
Do you know that the legal period can be reset? Well, some uninformed borrower make payment to their credit card account after their debt is time barred. That act is going to restart the legal time period. Borrower’s credit card provider then regains its ability to make court order borrower to make payment to them.
However, when the statute of limitations on credit card debt is up, does borrower no longer have debt? Is creditor unable to demand payment for that debt? The answer to both questions is: no. Debt is still exist even if legal period to pursue it has ceased. That debt is still going to be shown in your credit report and will be there for the next seven years. Your credit card company is still able to demand payment from you even though that period has ended. Fair Debt Collection Act, however, protects borrower by regulating when the company is allowed to contact them.
Borrower can actually request to remove old debt from their credit report. But this can only be done when there is inaccuracy in the debt. If borrower can handle non-stop pursue for payment by their card provider, then it is best to let the account in dormant after statute of limitations on credit card debt. Nonetheless, to be free from that, borrower can pay off their debt, declare bankruptcy, or cancel that debt.