Credit Card Debt and Consumer Law

If you’ve ever gone any length of time without paying overdue credit card debt, you’ve probably gotten a call from a debt collector. The Fair Debt Collection Practices Act is a federal law governing how and when debt collectors can contact consumers. The Fair Debt act also dictates where legal action can take place for consumers facing unpaid credit card debt. For instance, in most jurisdictions, debt collectors can file suits where “the consumer signed the contract,” or where the consumer lives. However, some credit card agreements stipulate that the home state of the issuer, not the consumer determine the major provisions of a credit card debt contract.

Statute of Limitations on Credit Card Debt

In California, the statute of limitations for collection unpaid credit card debt is four years. That doesn’t mean, though, that credit card debt goes away just because it might go beyond a time threshold. The statute of limitations just means that debt collectors cannot sue to collect unpaid bills, if the debtor shows up in court. The statute of limitations laws exist to protect people from claims that are brought up after evidence has disappeared.

“Time-Barred” Credit Card Debts

“Time-barred debts” are credit card debts that have gone beyond the statute of limitations. If a debt collector sues to collect a time-barred debt, the suit can be dismissed by letting the court know the debt is time-barred. It’s important to take heed of court papers referring to these debts. Many consumers who ignore court notices about old debts end up losing cases that might have been thrown out of court because the statute of limitations ran out.

An experienced consumer lawyer will help you keep track of these court decisions and changing statute of limitations rulings. Interpretations may change over time as to how state laws govern contracts interpreted by the courts, when applied to individual circumstances.

Court Takes Precedence in Credit Card Debt Cases

In a 2008 case in Georgia, the Georgia Court of Appeals ruled that the statute of limitations on an unpaid credit card debt was six years. Georgia code, however, set the limit on open-ended accounts at four years. The appeals court applied the law for written contracts to credit card debt (six years).

The moral is that it’s difficult to predict how courts will rule when faced with expiring credit card debt cases. For instance, in Kentucky, there’s a five-year expiration date for oral contracts, but a 15-year period for written contracts. Since credit card agreements can be changed unilaterally by the card issuer, some state courts have ruled that these don’t qualify as written contracts. In such a case, court rulings take precedence over actual written or oral credit card debt contracts.

Rights of Consumers in Credit Card Debt Cases

It’s important to know your rights against debt collectors. The Fair Debt Collection Practices Act was made to protect consumers rights. This is to against harassment, excessive phone calls, threats. Consumers also have the right to sue debt collectors individually or in class action suits for violations of the law.

During first contact with a debt collector, they must give a “mini-Miranda” disclosure. This is used to inform debtors of their rights to dispute the debt, and must tell the debtor:

  1. Amount of credit card debt owed.
  2. Name of the creditor.
  3. That unless the consumer disputes the validity of the debt within 30 days, the debt will be considered valid.
  4. That the consumer can ask for verification of the debt.

Protection Against Credit Card Debt Collectors

A consumer can ask for written verification or proof of the debt. Legally, collection calls and letters must legally stop until the debt is verified. The verification letter must be sent in writing within 30 days of initial contact from a collector. If calls do not stop, and collectors are harassing debtors’ friends, neighbors, employers, a crease communication letter can be sent.

Some consumers have reported debt collectors showing up at their homes, flashing a “badge,” claiming to be police officers. The Fair Debt law prohibits this. Impersonating a police officer is a crime, and consumers are advised to contact their local police if this happens.

Taibi Law Center has over 25 years experience dealing with credit card debt cases in San Diego. We will get the calls and harassment to stop, and will get you on your way to a debt-free life.


Stop Creditor Harassment: At Taibi Law Center, we can help slow, and in most cases, stop creditor harassment. As soon as we take responsibility for your case, we will provide you with the ability to turn over all creditor calls and correspondence to our expert staff. We provide a 24 hour hotline for creditors so they can get information regarding your debt without bothering you.

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