How much do you know about the statue of limitations on credit card debt? Credit card companies have specific rules and regulations that they must follow when it comes to collecting old debt. Even if you're not late with credit card payments right now, you should know as much as possible about these rules. A major medical incident, foreclosure of your home, or loss of your job can be devastating to your financial situation. When it comes to old debt, knowledge is power and the more you know right now, the more you can help yourself down the line if you hit financial trouble.
You know that credit card companies keep close track of your payments. If you stop making payments and you haven't paid off your balance, your account is considered delinquent and the clock starts ticking. how long will it take before the debt is considered expired? The time frame varies from state to state. In some states, the debt expires in as little as 3 years. In other states, it takes 10 years before the debt is expired. You can contact your local chamber of commerce or your bank to find out what the time frame is in your state. Once the allotted time has passed, the credit card company cannot sue you in court for the debt you owe.
They might try to sue you anyway, however , it will be up to you to prove that the debt is old and can't be collected. If you are careless and throw your court paperwork away without responding, the credit card company could win the lawsuit and then you would be responsible for paying back the debt. Keep track of all of your payments, including copies of cancelled checks, so you can prove that debts are old if the company chooses to sue you.
Just because the credit card company can't sue you doesn't mean that they can't try to get back the money you owe. They may call you or send you letters. They may sell your debts to other companies that may call you or send you letters. Some collection companies may blur the truth in the hopes of tricking you into paying money you no longer owe. If you get many, many calls and letters, you may be tempted to send a tiny bit of money. You might send a letter or sign a letter that states that you do owe the debt, in the hopes of getting a little peace.
If you pay money or acknowledge the debt as yours, the clock resets and you owe the debt once more. If you have no intention of paying off your old debt in full, make no payments and sign no claim letters. You could end up being on the hook for very old debts. Instead, ask for the mailing addresses of the people who call and send a polite but firm request for them to stop calling. Don't mention your debt in this letter. Just mention that the calls must stop.
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