Money | Debts | Financial Freedom

Statute of Limitations for Credit Card Debt

Each stat has a different law when it comes to the credit card debt statute of limitations. These range from three to ten years with some states having even longer credit card statute of limitations. These laws are not in place to protect to the credit card company, but the consumer. What this means is that credit card debt collection can not take steps to sue over credit card debt once the statute of limitations has passed.

However, the payment of your debt is still required. An agency in charge of debt collection can still make every effort to collect the card debt from you.[ad#dfi-adsense-300x250-alignleft]All this means is that when the debt you accrued on your credit cards is purchased by these companies that collect debt, they are not legally allowed to sue for your debt if there as been a statute of limitations passed.

Debts, or old paper, are sold to these collection agencies by credit card issuers for a small part of pennies on a dollar. They sell off much of this mature debt at one time to try and recover at least some of the money that was lost due to debts not being paid. This is when a collection agency tries to then collect the debt amount that was originally owed. The collection agency then keeps the money you pay and uses it to pay off the debt they have purchased.

Because of Fair Debt Collection laws that have been passed, collection agencies are not permitted to harass you, but they are still justified to collect the debt you owe from you. No matter how much time has passed, consumers are still required to pay the debt. If a friends or family were to lend you money, it would still be owed to them regardless of how long it has been since you borrowed it. This same principle applies to credit card debt.

Many people think that the statute of limitations on credit card debt will pass and the debt will be erased from their credit history and credit report. There is no truth to this. Collection agencies are not authorized to sue you, but you still owe the debt. That is the only thing that the statute changes. Because many of the collection agencies purchase the debt you owe for a lesser amount, you should be able to make an account settlement for a significantly lower cost by settling with a collection agency.

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