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

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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

Answers:

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

Answered 10 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.


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