An attorney with the National Consumer Law Center has published an article detailing how attorneys can use the confusing array of trying to determine when the statute of limitations on a credit card debt expired as a means of having lawsuits filed by collection agencies or debt buyers against individuals dismissed.
The statute of limitations can be a relevant and important component of a defense strategy, the lawyer argues, because debts can be transferred or sold many times before an entity decides to move forward with a lawsuit against an individual as a means of attempting to recover an unpaid debt, and the amount of time that transpires between when the statute of limitations clock started ticking and when the lawsuit is filed can work to an individuals’ benefit.
Years may elapse from default to when the last debt buyer in the chain of ownership purchases the account, and then that debt buyer may take additional time after purchasing the debt to actually filing suit.
The full article, which is behind a paywall, offers insights into the following areas:
- Which of a state’s statute of limitations applies — one for written contracts or one for non-written contracts;
- Which state’s statute of limitations applies — the forum state, the state listed in the contractual choice of law, or the card issuer’s home state;
- When does the limitations period begin — from when the consumer stopped making payments or when the card issuer later claims it has demanded full payment;
- Under what circumstances has the running of the limitations period tolled (i.e., stopped counting for a time) or revived (i.e., started counting all over again)
A debt buyer bringing a collection lawsuit is unlikely to consider all of these issues and the consumer attorney may be able to dismiss a suit based on a superior analysis of the applicable limitations period.