When does the Statute of Limitations start oncredit carddebt?

UPDATED: Mar 5, 2011

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When does the Statute of Limitations start oncredit carddebt?

I received a summons from a collection agency; they are seeking a judgment. The debt was from a credit card which was closed in 2002, still over the limit. I’ve made payments per a verbal agreement made with them over the phone (I never signed anything). It stipulated that I pay a set sum each month. I last paid them in 01/10, when I lost my job. They turned the debt over to a collection agency. I did not receive their settlement offer until after the specified expiration date and didn’t personally recieve the summons. When does the SOL clock on this start and how can I avoid a judgement? And is it feasible to set up a payment plan a collections agency after a summons for judgement? In AZ.

Asked on March 5, 2011 under Bankruptcy Law, Arizona


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

The statute of limitation on the original debt starts running when the default--the nonpayment--occurs. However, if you had an agreement to make payments, then the statute of limitations on a default, or failure to pay under that agreement, will start running when you stopped paying pursuant to the agreement. From what you right, it seem that was in 2/10 or thereabouts--sometime after your last payment under the agreement. When you stopped paying per the verbal agreement (and note: verbal or oral agreements *are* enforceable), that's what gave rise to a cause of action. It would be worth consulting with an attorney who can evaluate the situation in detail, since the specific facts are vitally important, but there is at least reason to think that the SOL did not start running until '10.

You can always try to set up a payment plan, even after a legal action starts. Whether it is accepted is voluntary, and depends on what you're offering, what they think they could get via lawsuit, etc.

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