Ready to test your knowledge of the Statute of Limitations ?
Read on, anyway.
1. True or False? The Statute of Limitations limits the period of time a creditor can collect an unpaid credit card debt.
It limits the time a creditor can file suit to collect an unpaid credit card debt. Collectors can request voluntary payment until the day you die….or pay off the debt. Request, that is. Suggest. Point out the psychic benefits of paying your debts. Ask, if you will. Beg, even. But under no circumstances can they threaten legal action, bank levies, wage garnishment or jail. Even so, “post-statute” collection calls can get pretty rough, since the collectors have no legal recourse if you decline their offer to accept payment.
2. True or False? For a credit card collection lawsuit in California, the statute of limitations is always four years.
False. The boilerplate contracts which the banks enclose with your new credit card, have a “Choice of Law” provision. This provision identifies the state whose law governs the contractual relationship between the credit card issuer and the credit card holder. A number of these Choice of Law provisions select, as the controlling law, the laws of such states as Delaware [Chase, Bank of America]; Virgina [Capital One]; and, New Hampshire [Providian]. In each of these states, the applicable limitations period is three years.
3. True or False? The limitation period starts with the date of your last payment.
False. It starts on the date the credit card agreement is breached. Breach occurs upon failure to make the payment which comes due after the last use of the card or the last payment. That is: use the card for the last time…you are still current. Make your last payment… still current. Miss your next payment…breach. Start the clock, maestro.
4. True or False? If you make another payment before the statute of limitations expires, the clock starts all over again.
Oh no ! That’s True. So watch out for debt collector requests for a small “good faith” payment.
5. True or False? Once the statute of limitations expires, a small good faith payment does not revive it.
True. So watch out whenever debt collectors tell you that the statute was revived.
So, now you know about the statute of limitations….
Let’s be careful out there.