Statute of Limitations on Credit Card Debt

by Rae

I am 21 and have been having credit trouble for about two years. I owe 2 companies (US Bank and CitiCards). I have not signed or agreed to anything in 2 years. On collection agency has only sent one letter and no phone contact in 2-2 1/2 years. The other company has hounded me, but I have not agreed to payment in 2 years due to unemployment, school, etc. I have read the statutes of limitation, but am still unsure of how to go about this. Please help! :)

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Sep 05, 2011
Statute of Limitations on Credit Card Debt

The statute of limitations is the amount of time during which you can be sued for a past due debt. Once the statute of limitations on a debt is up, you can no longer be sued, although the creditor or debt collector is entitled to continue contacting you to try to get you to pay what you owe.

The length of the statute of limitations depends on the type of debt and the law of an individual state but it begins ticking on the date that you miss your first payment on a debt. I am not an attorney, but my resources show that in California, the statute of limitations on credit card debt is 4 years. Therefore, based on what you have told me, the statue of limitations on your debts still applies, which means that you could be sued for what you owe.

You need to be aware that when you do not pay your debts, that information will show up in your credit reports for up to 7 years and will lower your FICO scores. As a result, it may be difficult for you to get new credit at a reasonable rate for some time to come, to rent a place to live, to purchase adequate insurance and even to qualify for certain kinds of jobs --increasingly, employers are reviewing consumers credit files or checking their scores to help them make hiring decisions. All of this means that not paying your debts could make it much more difficult for you to build a good future for yourself once you are out of school. You should also know that if you are sued over the money you owe and there is a judgment against you, that information will damage your credit too.

A better way to deal with your debts given that you are at risk of lawsuits is to explore your options for resolving your financial problems once and for all. Those options include working with a nonprofit credit counseling to set up a debt management plan, debt settlement and consumer bankruptcy. I recommend that you start by scheduling an appointment with a credit counseling agency near you. Go to the web site of the National Foundation for Credit Counseling to find one. Or, you may want to schedule a free consultation with a bankruptcy attorneyin your area. The counselor or the attorney will look at your finances and advise you about your best course of action. Good luck!

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