Living Frugal
What's the Credit Card Debt Law?
How will the credit card debt law protect me?
You've tried but you're buried under a mountain of credit card debt and you're trying to find some debt relief programs that fit your situation. You've already received a debt collection letter. You've thought about defaulting on your unsecured credit card debt but can they sue you? The answer is yes they can and you need to know the law about debt collecting in your particular state.
Under the credit card debt law, there is a statute of limitations that limits the time window for a creditor to sue you. Each state has it's own statute of limitations. You first need to find out what the credit card debt law is in the state where you reside. The law is referred to as a statute of limitations and you need to understand your state's law and how it works.
The majority of states have the statute of limitations somewhere between 3 and 10 years on average. There are some states where the time span is longer.
The statute of limitations does not prevent a creditor from attempting to collect the unsecured debt from you, it only prevents them from suing you and winning in court after a certain period of time. That doesn't mean they can't sue you, it just means they most likely won't win. You'll still have to spend the money and hire a lawyer to represent you.
If you make a payment on an old debt, it restarts the clock all over again. Let's suppose the statutes of limitations for credit card debt is 3 years in your state. Your debt is 5 years old. You make a payment on it - even thought it's a small amount you've just re-started the clock and now the creditor may be able to sue you and win for that old debt. It's called "re-aging" old debts.
You may want to also look at settling your credit card debt as opposed to defaulting and taking a chance on being sued.
