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Credit Card Statute of Limitations

It doesn't hurt to know whether the credit card collection lawsuit against you is barred by the Statute of Limitations. You could save a pile of money.

One of the first questions I ask is: "When was your last payment." Here's how that question figures in:

Credit card lawsuits are based on breach of contract. The California Statute of Limitations ("SOL") for Breach of Written Contract is four years, two years if there is no writing. Credit card contracts are in writing. Thus, the California SOL is four years..... that is, unless it's three!

It all depends on the credit card, and here's how you know:

Some background first: The statute of limitations refers to a law which establishes the length of time an injured party has to file a lawsuit to collect damages. In credit card cases, the clock starts ticking when you breach the credit card agreement. The breach occurs when you miss a payment and make no further payments or use of the card. From that day forward, the creditor has either three or four years - depending on the card - and not one day more, to file a collection lawsuit. After that, a collection lawsuit becomes "time-barred" - legalese for "too late". Filing a lawsuit to collect a consumer debt after the expiration of the statute of limitations is a violation of both the federal and California Fair Debt Collection Practices Acts. If you believe you have been victimized by a time-barred collection lawsuit, you can call us for a free consultation.

Here's how the SOL is determined:

Credit card agreements contain a "Choice of Law" provision, with which the Banks choose the state whose laws govern the rights and obligations under the agreement. Bank of America, Chase Bank and Discover, for example, select the law of Delaware, where the banks are incorporated. The Delaware statute of limitations is three years. Thus, when you default on a Bank of America (including MBNA),Chase, or Discover credit card, a lawsuit to enforce collection must be filed within three years of the date of default. After that, it's too late to sue; and, once the statute of limitations expires, a payment does not revive it.

In addition to the above, Capital One cards used to have a three year SOL by virtue of a Virginia choice of law provision. Now that's changed, The choice of law provision for Capital One cards now refers to California law.

For the other cards - American Express, Citibank, G.E. Capital, HSBC, U.S. Bank, Wells Fargo, among them - the SOL is four years. Debt buyers "stand in the shoes" of the original creditor, so the statute of limitations isn't changed by the purchase and sale of a debt.

Some final thoughts about the statute of limitations:

The SOL does not affect the status of the debt - that is, whether or not the debt is owed. It speaks only to the time period during which a lawsuit can be filed to collect the debt.


Abuse, misinformation and deceit are favored tactics of collectors of old, time-barred debt. They know they can't sue to collect, so they resort to threats and harassment to separate you from your money. For example, if anyone says, " I have a lawsuit ready to go and the police are going to bring it to your job tomorrow, if you don't pay.....", the debt is time-barred, almost certainly. So don't believe them and don't worry.

If you have any questions about the statute of limitation in your case, or collection tactics, feel free to call us toll-free at (877) 320-2380.

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