When you hear the term “statute of limitations,” you probably think of one of those TV shows about cold-case detectives who race against the clock to catch a killer before they’re no longer allowed to prosecute him. That’s fair, but there are plenty of other situations in which statutes of limitations apply. One may hit close to home: credit card debt in Indiana. We offer a basic introduction to this concept and discuss how it can benefit your case.
Indiana’s Statute of Limitations on Credit Card Debt Collection
Since these matters are left to state governments, every state in the country has its own statute of limitations on credit card debt collection. In Indiana, credit card companies aren’t permitted to sue card users for debts that stretch back more than six years. Other states impose limits of between three and 10 years. Kentucky and Virginia are the only two states that lack clear statutes of limitations for credit card debt.
Why Does the Statute of Limitations Exist?
Although many consumers gripe about their length, statutes of limitations are borrower-friendly laws that penalize credit card companies for failing to collect on a debt in a timely fashion. Over the years, it has become clear that borrowers can’t be expected to make sound decisions with the indefinite threat of legal action hanging over their heads. Additionally, attempts to collect on decades-old debts can undeservedly damage delinquent borrowers’ credit scores. Indiana’s statute was recently affirmed in Smithner v. Asset Acceptance.
How Can It Help?
It’s not hard to use Indiana’s statute of limitations to your benefit. If you become unable to pay your credit card debt for any reason, you should immediately make a note of your last payment date. It’s also important to make note of your creditor’s first past-due payment notice. This generally “starts the clock” on the statute. If you aren’t served notice of a formal lawsuit within six years of this date, it will be much harder for your creditor to collect on the old debt.
However, it should be noted that statute of limitations cases aren’t always cut and dried. Since “credit card states” tend to have creditor-friendly laws, borrowers often face lawsuits in the states in which their creditors are based. This can add to the cost of defending such a case and demands the attention of a qualified attorney.
We hope you’ve found this information helpful, but six years is quite a long time. If you’re unsure whether the statute of limitations applies in your case or simply want to know more about how the law affects your old credit card debts, we’d be happy to talk. Visit us online or call the offices of our Indianapolis, IN law firm at (317) 842-8283.