Credit Card Debt Statute of Limitations
According to Illinois law, the statute of limitations on unpaid credit card debt is five years. Statutes of limitations are used by all states to prevent legal action on claims that have become old or “stale.” A state may have dozens of different statutes of limitations applying to hundreds of different types of claims.
Why Are Statutes of Limitation Important for Debt Collectors?
If the statutory limitations period has expired on a credit card debt, a debt collector can still call and ask you to pay the debt. However, they can no longer sue in court and obtain a judgment against you.
If they do sue, and you receive notice, don’t ignore it. If the debt collectors sue and you fail to show up and assert your rights by providing evidence to the court that the claim is time-barred (expired), the court may not know that the claim is time-barred. It may then grant the debt collector a judgment (known as a default judgment).
While the original credit card debt may have expired, the default judgment “revives” the dollar amount of the unpaid debt you owe (not the actual debt) and creates a new obligation the judgment, so it is vital that you respond to any court notice. If you aren’t sure what the document means, a Chicago consumer attorney experienced in handling collection matters can help.
Old Debts
You should not make any payments on old credit card debts that you believe to be more than five years in age. By paying on the old debt, you acknowledge it. Acknowledgment of an old debt can revive the debt and restart the statute of limitation clock for legal action.
Debt Collection: Big Business
As the Illinois appellate court noted, the buying of old credit card debts for collection had grown to a $110 billion business in 2007. Half of the 158,152 debt collection cases filed in Cook County were by debt collection agencies. In the Portfolio Acquisitions case, the Appellate Court listed the seven different entities who had handled some of the collection process on the old debt.
Contact Us Today If Limitations Expired
Given the volume of transactions and the number accounts, it is inevitable that errors will occur. If you had old debts or have received collection notices or calls concerning debt that may not be yours, you may want to speak with an attorney, as failing to act or taking the wrong actions could leave you liable for a previously time-barred debt.
Call the Atlas Law Center today to get started.
