If a debt collector is suing you or threatening to sue you, you can check your state's Statute of Limitation (SOL) on your credit card debt to see if you may have what The Federal Trade Commissio (FTC) calls a “time-barred debt”. If this is the case, you may not have to repay the credit card debt if the debt collector sues you, or threatens to sue you.
Each state has laws about when debt collectors are barred from taking the matter to court. The Statute of Limitation could work in your favor, but there are a few things to keep in mind. If you are responsible for the credit card debt and it passed the time-barred test, the debt collector agencies can still try to collect the debt. They cannot file a lawsuit, or threaten to sue you: but, if they do, and you do not show up in court with proof that the debt is time-barred, you may have to pay up.
Instead of dismissing a court notice, thinking you are safe because of the “time barred” status of your debt, get a good consumer lawyer to look into the matter.
1 You need to look carefully at the Statute of Limitation for your state and also the state of the
company that issued the credit card.
2 You need to be careful about doing anything that would cause the court to rule against you even
though your debt is time-barred.
3 You need to find out how it would affect your credit report.
4 You do not want to do anything that will restart the time on your old debt.
Read the FTC Consumer Alert for more details.
As a matter of principle you may choose to take full responsibility for the debt and find ways to repay it. If the SOL works in your favor, you may choose to learn from your mistakes and resolve not to repeat them. As humans, we are generally thankful whenever debt relief is granted.
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