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What is the Statute of Limitations - Credit Card Debt? - YouTube
Channel: Consumer Warrior
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in today's video we're going to discuss
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what the statute of limitations is on a
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credit card debt why it's so important
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and some of the biggest
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misunderstandings I hear from clients
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when it comes to dealing with the
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statute of limitations as a defense to a
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credit card collection action my name is
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John Skiba and I'm a consumer protection
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attorney in the state of Arizona and if
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this is your first time here on my
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youtube channel please go ahead and
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click Subscribe and that way you'll get
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notified as soon as I put out new
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content relating to bankruptcy debt
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collection lawsuits and how to deal with
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serious debt problems let's talk about
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the statute of limitations the statute
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of limitations is the amount of time
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that your creditors have to sue you if
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you stop making a payment for instance
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let's say that you have a an American
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Express card and you stop making a
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payment on it eventually they're likely
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going to sue you the reason why they
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want to sue you is because they want to
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get a judgment against you so they can
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garnish your wages or so they can levy
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your bank accounts
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it's important to note that most
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unsecured creditors like credit cards
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they can't do a whole lot to you unless
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they actually sue you and get that
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judgment they can be annoying they can
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damage your credit score but they
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usually can't take anything from you
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unless they take that step so the
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statute of limitations gives them a
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certain period of time that they have to
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file their lawsuit and if they don't
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file their lawsuit within that certain
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period of time they're barred forever
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from bringing it so it's a very powerful
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defense if you get sued by one of your
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debt collectors and it turns out that
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the statute of limitations has expired
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then that lawsuit can be dismissed
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pretty quickly not only that but you may
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have an FDCPA claim a Fair Debt
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Collection Practices Act claim against
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them for suing you on a debt that they
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can't pursue so let's talk about the
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statute of limitations what it is and
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how long you have now the tough part
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about this is that it's different in
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every single state most statute of
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limitations on credit card debts range
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from 3 years on the short side up to 6 7
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even 10 years in some states that they
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have to file suit against you not only
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that if you're not careful you may reset
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the time if you make certain payments or
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if you acknowledge the debt in writing
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the important thing to note is when
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the statute of limitations starts to
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accrue or when it starts to run so with
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most states that's going to happen when
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the creditor could have sued you so
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again let's take my example of American
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Express you have an account with them
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and you stop paying on most credit card
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terms and agreement in terms of
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conditions the agreement that you
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entered into states that you will be in
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default if you don't make a payment
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within 30 days after it's due and so
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that's when the statute of limitations
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in most jurisdictions starts to accrue
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that's when it starts is when you miss
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that very first payment now if you bring
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a current the next month later then
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usually that resets the statute and it
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wouldn't start again until you missed a
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payment well let's say you missed a
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payment and then you just stopped paying
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on it completely you would look back to
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that first time when the payment was due
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that your thirty days late you didn't
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make the payment that's day one for
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whatever the statute of limitations
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period is for your particular state and
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again you have to research this because
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when it comes to the statute of
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limitations not only is it different in
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each state it's different for different
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types of legal claims so like in Arizona
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where where I live there's a specific
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statute of limitations for credit card
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debt in Arizona is six years so they
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have for six years from the time that
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they file or from the time that you
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missed that first payment they have six
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years to file the lawsuit and all they
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have to do is file the complaint in the
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summons with the court another big big
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misunderstanding that I hear quite often
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is someone who's already being sued by a
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debt collector the lawsuit goes on
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forever as they tend to do civil
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lawsuits can go on a year or even more
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and sometimes people want to say hey
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this lawsuits been going on so long it
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has to be outside the statute of
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limitations at this point that at that
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point it doesn't matter if they filed
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the lawsuit that very first day that
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they file the lawsuit if that was done
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within the time period in your state so
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for example in Arizona if that was done
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within that six year window that they
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have to file it statute of limitations
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is no longer a defense even if that
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lawsuit goes on for two years three
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years or however long it goes on it's no
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longer a defense but if you calculate it
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out and it has been more than the period
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that's allowed in your state in Arizona
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if it's been more than six years and
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they filed a lawsuit
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you would then file a motion to dismiss
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that claim because they're no longer
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legally allowed to try to collect on it
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now it's important to know this I should
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make a quick correction there they can
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they they're no longer no longer legally
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allowed to file suit on it but they can
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ask you to voluntarily pay it you don't
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have to you can say no and there's
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nothing they can do about it but they
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can ask you to voluntarily pay it and so
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you can still may get letters in the
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mail even though you're not being sued
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by them they may call you they may send
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you letters asking for voluntary payment
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but they can't force payment and they
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can't garnish your wages or levy or bank
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accounts because they haven't filed the
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suit within that applicable statute of
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limitations period so hopefully that
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clears up some confusion if you have any
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questions go ahead and put them in the
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comments below I do check those things
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throughout the day and I'm happy to
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respond to them alright I was also
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asking to go ahead and subscribe to the
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channel we put up new content here on a
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regular basis dealing with how to solve
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serious debt problems through bankruptcy
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debt collection lawsuits whatever it is
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that you're dealing with we put a lot of
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content up please go ahead and subscribe
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thanks for watching today
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