Credit Card Statute of Limitations – True or False?

Ready to test your knowledge of the Statute of Limitations in credit card lawsuits ?

Proceed, 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.

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10 Responses to Credit Card Statute of Limitations – True or False?

  1. How can I find out when the statute of limitations is up on a particular debt, when the creditor won’t talk to me and have referred the case to an attorney. Can I trust that the attorney will tell me the truth if I ask? Please advise.

    • Bill Rose says:

      Sorry for the late reply. If you are asking me can you trust attorneys the answer is….Can you trust anybody? Attorneys are no different.
      You can find the statute of limitations for each state by searching on-line. Credit cards that are issued by Delaware Banks – most notably Chase and Bank of America – are three years. Virginia – Capital One – is three years; and. New Hampshire – Providian – is thee years. Unless I’ve forgotten some, the rest are four years in California.

  2. Brock says:

    Interesting… but I have two questions regarding SOL.

    1. How does tolling on SOL work here in California. I recently was sued by a credit card company but I prevailed. What happens during the 8 month period the lawsuit was in process?

    2. Where does California side when it comes to Choice of Law? For example, a credit card in Virginia has a 3 yr. SOL while California has 4 yrs. Which one do we go by?

    Any input would be greatly appreciated.

    • Bill Rose says:

      My response to your two questions:
      1. A lawsuit does not toll the Statute of Limitations.
      2. A choice of law provision in a credit card agreement will apply the chosen forum’s statue of limitations in a California collection lawsuit.

      Hope this helps.

  3. Donald says:

    For point #4, this case appears to indicate that partial payments do not reset the SOL:

    RNC, Inc. v. Tsegeletos (1991) 231 Cal.App.3d 967, 972.

    • Bill Rose says:

      Thanks for your comment Donald.
      Page 972 of the “RNC, Inc.v. Tsegeletos” case” deals with the statute of limitations for a “book account”.
      A book account occurs when the parties maintain an ongoing creditor-debtor relationship, without a written agreement, and the creditor maintains a written tally of purchases and payments.
      As an example of the origins of the “Book Account” concept, think of a general store 100 or so years ago, when the clerk kept a running account of a customer’s balance in a notebook or credit ledger kept handy, right behind the counter.
      In a book account, the statute of limitations begins to run from the date the account is closed and no further credit is extended. Thus, as long as no further credit is extended, a payment on the account will not reset the limitation period.
      Generally speaking credit card deb collection lawsuits are not brought solely on a “Book Account” claim, but have claims for Breach of Contract also, where a partial payment can be viewed as an acknowledgment of the debt and a promise to resume payments. Thus the SOL is reset. Once the SOL has expired, however, a partial payment will not revive it.
      Hope this helps.

  4. Alfred Davoodi says:

    I have a $75000, and a $15000.00 personal loans, with Wells Fargo, and few credit cards with Chase, and capital one. the last payment I made was over five years ago, Has the statute of limitation run out on my loans, and credit cards. Is there any way I can clean the negative credit from my record.

    • admin says:

      ANother area I don’t do is credit repair. Should consult an attorney who does this work, and ask him or her if the report of the debt comes off your report byitself in 7.5 ydears.

  5. Alfred Davoodi says:

    Does an oral acknowledgement of the debt to a collection agency on the phone, renew the statute of limitation on the credit card debts

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