Have you heard about the laws on Statute of Limitations for credit card debt? Do you know that one can remove his or her “old” outstanding balances using this law? In United States, all the debt collection matters are regulated under the Fair Debt Laws and the Fair Credit Laws. If a card user has past due which is over a certain period of time, he or she stands a high chance to get rid of the debt if the debt has been expired. How can we determine whether our debt has been expired or not?
In order to obtain the most accurate information, you are advised to refer to the Statute of limitations in your state. Each state has its own rules and regulations. The time frame varies from one state to another. The length for the Statute of limitations can be 3-8 years, depending on which state you are living. In general, there are 2 methods of calculating the duration. If you want to confirm whether you are qualified under this rule, you are advised to refer to your credit card agreement.
In the agreement, it normally states the way how the period is calculated. The duration is either based on the first time the card users fail to make payment on their accounts or the date the credit card company sends the demand letters to their debtors for full payment. If your past due is really expired, you can straight away inform your creditors that you have no more obligations to pay off your debt. The creditors have to remove your outstanding balances from your account and they can’t take any legal action on you. You are completely debt free!
However, in some states, you need to go through the rules carefully. If you have made partial payment on your debt, the starting date for the Statute of limitations will be reset. Besides, without any supporting document on hand, it is hard for you to convince the court if your creditor brings you for legal proceeding. You need to compile the receipts to prove that the dates of your purchases are “old” enough under the Statute of limitations. If you have lost all the important evidences, your debt can’t be forgiven and you still need to find other solutions to pay them off.
To sum up, Statute of limitations can be an advantage for some people because they don’t need to pay a single cent to get rid of their debt. However, I don’t encourage card users to use this method to remove their outstanding balances. Failure of making payment will still leave a negative impact on the credit file. Hence, being a responsible card holder is still the best.
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