Statute of Limitations on Credit Card Debt

Unpaid credit card debt doesn’t stick around forever. There’s a time limit set by the statute of limitations on credit card debt. Once enough time has passed without a payment, you’re not legally responsible for the debt anymore.

But there are ways to accidentally reset the clock if you’re not careful. If you have old credit card debt, here are a few important details about the statute of limitations and the ways you could get credit card debt relief.

What is the Statute of Limitations for Credit Card Debt?

The statute of limitations on credit card debt is the number of years a person can be sued for an unpaid credit card balance. It ranges from three to 10 years, depending on the state laws that apply. Each state has its own laws setting the statutes of limitations for credit card debt, crimes, and civil matters.

To be clear, if you have a debt, it never actually goes away. It’s always your debt. What goes away is the creditor’s legal right to win a lawsuit against you for that debt. If they sue you for a debt and the statute of limitations has passed, the debt is time-barred. You could ask the judge to throw out the lawsuit.

As the debtor, your state’s statute of limitations may apply—but not always. Some credit card agreements have a “Choice of Laws” clause that designates a specific state’s laws for any disputes. The state chosen could be the credit card company’s home state or a different state entirely.

Check your credit card agreement to see if there’s any information about which state’s laws apply. If a creditor or debt collector is trying to collect the debt, you can request a copy of the agreement you signed as verification that the debt is legitimate.

The table below has the statutes of limitations for credit card debt in each state. To be clear, these time limits only apply to credit cards. Other sorts of debt could have longer or shorter limits.

Table: Statutes of Limitations on Credit Card Debt

*While this list is accurate at the time of publication, states may change their statutes of limitations. Be sure to check with your state’s attorney general’s office to confirm the current laws on debt collection, or consult with a licensed legal professional.

You May Like These

Credit Card Debt Forgiveness

Credit Card Minimum Payment: Everything You Need to Know

How to Get Out of Credit Card Debt Fast

When Does the Clock Start on Statutes of Limitations?

The clock normally starts on the statute of limitations when you stop making payments on your credit card. For example, imagine that you live in California and missed your scheduled credit card payment on July 1, 2020. If you didn’t make any payments after that, then the statute of limitations for your credit card debt ran out on July 1, 2024. That was the last day anyone could sue you over the credit card debt.

States’ laws can vary over the exact event that starts the clock on the statute of limitations. And it’s often possible to restart the clock, making you legally responsible for old credit card debt again.

How to Avoid Resetting the Statute of Limitations

In many places, creditors and debt collectors can still contact you to request that you repay some or all of the money owed on a debt. They also typically aren’t required to let you know if that debt is past the statute of limitations. There are collection agencies that buy zombie debt at a very low cost, and then try to collect as much as possible. Even though people aren’t legally required to pay expired debt, some do.

Proceed with extreme care when dealing with debt collectors or creditors. If you make a payment, accept a payment plan, or agree to a debt settlement offer, you could reset the statute of limitations. The debt could become valid again. In other words, the statute’s limit begins all over and the debt collector can pursue you for payment. 

It’s not just making a payment that you need to avoid. In some states, just acknowledging that you owe the money could restart the clock. Debt collectors may use entrapment techniques to try to get you to say, write, or do things that restart the statute of limitations.

Traps and pitfalls to avoid with debt collectors

Debt collectors usually record phone calls, so it’s best not to discuss a debt until you know that it’s valid and belongs to you. The only thing you should say on the phone is that the caller must write to you with the details of the alleged debt. Then, politely end the call.

Once you request it, the debt collector needs to send you validation information about the debt. That should include the name of the creditor, the amount you owe, and how to dispute the debt. Don’t give any personal or financial information to a caller until you’ve confirmed that it’s a legitimate debt collector.

If the debt is time-barred by your state’s statute of limitations on credit card debt—and you don’t wish to pay it—you can reply to the creditor’s letter saying that you note that the debt is time-barred. However, don't acknowledge that the debt is yours.

Common tactics of debt scavengers 

Debt collectors that purchase old, expired debt are commonly known as “debt scavengers.” There are several shady tactics that debt scavengers use to try to get you to pay them. They may:

• Promise to leave you alone for a small payment. No, they almost certainly won’t. They really want you to restart the clock on the statute of limitations, which could happen if you make that small payment they’re requesting.

• Say they won’t report your debt on your credit report. An unpaid debt typically stays on your report for up to seven years. In most cases, paying off the debt before then isn’t going to change how long it’s on your credit file.

• Threaten to sue. Debt scavengers won’t be able to successfully sue you, because the debt is time-barred.

• Re-age your debt. This involves reporting your old debt to credit bureaus as if it were a new one. Re-aging debt is against the rules (though some try it), and you should dispute it with the credit bureaus if it happens to you.

• Verbally abuse or harass you. Abusive behavior from a debt collector is against the law.

• Misrepresent themselves as “litigation firms.” Few debt collectors are lawyers. They just want to scare you into paying up.

Many of these tactics are illegal. You can file a complaint with the Consumer Financial Protection Bureau (CFPB) about illegal behavior from a debt collector. You could also report the debt collector to your state’s attorney general or find a specialist attorney who might be able to sue for damages on your behalf.

Can a Debt Collector Contact or Sue Me After the Statute of Limitations Expires?

A debt collector may be able to contact you about debt after the statute of limitations expires. The legality depends on the state. On the other hand, once you’re passed the statute of limitations on credit card debt, creditors and debt collectors can’t sue you over it.

Some may still try it by filing court papers, even though you have a perfect defense: The debt is time-barred by the statute of limitations. But you must make that defense in court. 

Either you or your attorney needs to turn up at the hearing, armed with paperwork that proves the statute applies, and ask the judge to dismiss the case. As long as the statute of limitations applies, the judge will almost certainly oblige your request for a dismissal.

Even though the law is on your side, you still need to defend yourself so the judge knows that the debt is expired. If you don’t turn up to the hearing, there’s the risk that the plaintiff could get a default judgment against you.

Original creditors vs. debt buyers

The practice of chasing zombie debt has gotten more common. In the past, a credit card company’s own collection department or a collection agency it worked with would pursue debt for a few years. After that, if it didn’t sue you, it would likely just write off the debt after the statute of limitations kicked in.

Many card issuers started selling their unpaid accounts to third-party debt buyers. These debt buyers pay pennies on the dollar to purchase debt. For example, a large debt buyer could purchase $10 million in unpaid debt for $400,000 or $500,000.

Debt that's past the statute of limitations is some of the cheapest debt to purchase. Since the debtor is no longer legally responsible, the debt buyer will have a much harder time collecting. But the buyer doesn’t need to collect much to make a profit on the debt purchase. That’s why debt collectors could still call about time-barred debt.

What if My Credit Card Debt Is Within the Statute of Limitations?

If your credit card debt is within the statute of limitations, then the creditor could win a lawsuit against you. Waiting for the clock to run out might seem like a good way to go, but it’s rarely a good strategy. Your debt could continue to grow from interest and fees the longer you wait. The creditor or debt collector probably knows when the statute of limitations runs out, too, and may file a lawsuit before that happens.

Take control of your debt by working with a professional debt settlement company. Our Certified Debt Consultants can help you come up with a plan to get debt-free and put yourself on track for a better financial future. See if you qualify today.