What to do about the consequences of a defaulted credit card debt?

UPDATED: Aug 18, 2011

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What to do about the consequences of a defaulted credit card debt?

I had a credit card that was opened 7 years ago next month with a credit limit of $5,000. I went through some rough times. Bottom line is that I have not made a payment on this card in 5 years, when the balance was $5012; now the balance is over $15,000. What is the best way for me to get this resolved? It has ruined my credit and I cannot get approved to by a bicycle. Can the credit card company continue to add interest to this unpaid account? The statute of limitations for this type account in OK is 5 years from the date of last activity which would be next month. Will it be removed from my credit report then?

Asked on August 18, 2011 Oklahoma


M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

First of all, the statute of limitations has nothing to do with the length of time something can stay on your credit report, they are 2 separate things. Negative credit information stays on a credit report for 7 years, plus 180 days (except bankruptcy which stays on for 10 years). As for the statute of limitations, assuming that it is in fact 5 years for this type of debt in OK, then it will expire 5 years from the date of the last activity on the account. Therefore you can no longer be taken to court and sued for it. More importantly, this means that no judgment can be awarded which in turn means that your assets are protected from seizure. However, the date of last activity. starts from the time you were late or the late payment went into collection, not from the last time you made a payment on the account. Additionally, the SOL can also re-start from the time that you make any promise to repayor even acknowledgement that the debt is yours. So if you did either the statute may have been extended, as it were.

However, even if the statute does expire, that doesn't mean that you still don't owe the money although there is no legally effective way to collect it (but you may still get harassing calls, etc).

As for the amount owed, yes it can accrue interest, although there can be certain state imposed linitations in such cases.

At this point you should consult directly with an attorney in your are to go over your situation in detail. They can best advise as your rights/reponsibilities.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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