By Markus Allen
Founder of TruthIn7Minutes.com

A few years ago, I was on the receiving end of a barrage of collection calls about a past-due credit card bill... and I was able to take advantages of the statute of limitations (i.e. SOL) on debt to put an end to the nightmare of these calls and harassment.

Yes, I owed the debt... but the credit card company boosted the interest rate without notice and made paying back the debt unaffordable.

I started looking into my options and rights. And I stumbled upon a legal concept called the statute of limitations on credit card debt. It's a bit complex, but in simple speak:

Creditors and debt collectors can sue debtors to collect a debt.
But they can only do so while the debt is still "unaged." A debt remains "unaged" if we continue to pay this debt. But once we stop paying, the clock starts to tick. And depending on which state you reside in, an aged debt cannot be pursued in a court of law.

This window of time differs state to state.
The statute of limitations on debt's time period is between 3 and 10 years (again, depending on the state you reside in). See the chart below for the most up-to-date statue of limitations.

Once this time limit ends, the debt is legally discharged
And you can never be sued in court over it again. (After the statute of limitations on debt ends, it's officially called a "time-barred debt.")

Here's the kicker - making any sort of payment (or acknowledging a debt) resets the clock sort of speak. So for me, I simply ignored all collection efforts and never fell for these debt collection tricks...

... For example, as the statute of limitations approached, I was made all sorts of pleas to just make any payment... even $10 - just to "show good faith." But this is nothing more than a legal trick to restart the statute-of-limitations clock.

With that said, debt collectors can continue to pursue debtors even after the statute of limitations on debt ends... but legally, a debt collector cannot use the courts to get a judgement. And as a result, most debt collectors give up and move on.

Here's the dirty little secret about debt collectors... they buy huge portfolios of debt for pennies on the dollar. Whatever they collect is theirs to keep. But it's too cumbersome to ship these debt portfolios (which include all of the official paperwork we agreed to when signing up for the debt). As a result, these debt collectors are breaking the law and instead rely on scare tactics to bully us into payment.

These debt collectors rely on our ignorance of the laws and make their profits from those who don't know how to protect themselves, don't know their legal rights and freak out at the mere hint of legal action.

The bottom line for me is my credit card company was greedy. They jumped the interest rate for no reason (and without my consent). And when I challenged them with a debt validation letter (to prove the debt by showing where I agreed to a higher interest rate), they fell silent. As a result, I had my state's law on my side and my local court wiped out the entire debt on my behalf.

Here's the most up-to-date list of the statute of limitations on debt (on a state-by-state basis) listed by years:

State Oral Written Promissory Open-ended Accounts State Statute
Open Accounts
AL 6 3 6 3 §6.2.37
AR 3 5 3 5 §4-3-118
AK 6 3 3 3 §09.10.053
AZ 3 6 6 6 HB 2412
CA 2 4 4 4 §337
CO 6 6 6 6 §13-80-103.5
CT 3 6 6 6 Chapter 926 Sec. 52-576
DE 3 3 3 3 Title 10 Sec.8106
DC 3 3 3 3 §12-301
FL 4 5 5 5 §95.11
GA 4 6 6 4** §9-3-25
HI 6 6 6 6 HRS 657-1(4)
IA 5 10 5 10 §614.1.5
ID 4 5 5 5 §5-216
IL 5 10 10 5 or 10*** 735 ILCS 5/13-206
IN 6 10 10 6 §34-11-2-9
KS 3 3 3 3 §60-512
KY 5 15 15 5 or 15 §413.120 & 413.090
LA 10 3 10 3 §2-3494-4
ME 6 6 6 6 §14-205-752
MD 3 3 6 3 §5-101
MA 6 6 6 6 §260-2
MI 6 6 6 6 §600.5807.8
MN 6 6 6 6 §541.05
MO 5 5 5 5 §516.120
MS 3 3 3 3 §15-1-29
MT 5 8 8 8 27-2-202
NC 3 3 5 3 §1-52.1
ND 6 6 6 6 28-01-16
NE 4 4 4 4 §25-206
NH 3 3 3 3 382-A:3-118
NJ 6 6 6 6 2A:14-1
NM 4 4 4 4 §37-1-4
NV 4 4 4 4 NRS 11.190
NY 6 6 6 6 §2-213
OH 6 6 6 6 §2305.07
OK 3 3 or 5 5 3 or 5 §12-95A(1), (2)
OR 6 6 6 6 §12.08
PA 4 4 4 4 42 Pa. C.S.5525(a)
RI 10 10 10 10 §6A-2-725
SC 10 10 3 3 SEC 15-3-530
SD 3 6 6 6 §15-2-13
TN 6 6 6 6 28-3-109
TX 4 4 4 4 §16.004
UT 4 6 6 4 78-12-25
VA 3 5 6 3 8.01-246
VT 6 6 5 6 §9A-3-118
WA 3 6 6 6 4.16.040
WI 6 6 10 6 893.43
WV 10 10 10 10 §55-2-6
WY 8 10 10 8 §1-3-105


** Georgia Court of Appeals came out with a decision on January 24, 2008 in Hill v. American Express that in Georgia the statute of limitations on a credit card is six years after the amount becomes due and payable.

*** An Illinios appeals court ruled on May 20, 2009, that the statute of limitations on a credit card debt without a written contract was 5 years.

P.S. Have a look at my other investigations, videos and podcasts and get the real truth about life...



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