In general, the statute of limitations (SOL) on a debt starts 180 days after a credit card company charges off the debt. Each state has a different statute of limitations. To see what the (SOL) is in your state, click here.
Recently, however the question of which state to use as the time limit came into question in a Florida case (Florida SOL is 5 years). In Capital One Bank USA, NA v Gregorich, suit was brought after 3.5 years from the chargeoff date. The outcome was that the court ruled that the statute of limitations is governed by the Cardmember Agreement between the consumer and the credit card company, and not just the state statute of where the case is being heard.
In the Gregorich case, Capital One began a lawsuit about 3 1/2 years after the date of default. The Customer Agreement (Capital One’s term for Cardmember Agreement) specifically stated that it would be governed by Federal and Virginia law. The relevant statute of limitations in Virginia was deemed to be 3 years because the Agreement did not qualify as a “written contract” governed by the 5 year Virginia Statute of Limitations.
End result? Capital One loses.
Your lesson? Always check the Cardmember Agreement to determine the appropriate statute of limitations.
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9 responses so far ↓
1 d // Aug 1, 2008 at 12:26 pm
great info on credit card debt. But what about a hospital debt? my spouse had several emergency hospital visits, admissions & stays over several month period in 2003. I signed the “authorize to treat” paragraph in every instance but REFUSED & crossed out the paragraph stating as signor I agreed to pay any unpaid balance not covered by the ins. these hospitals continue to try to collect this balance from my spouse. do they have a leg to stand on?
2 vanessa // Aug 8, 2008 at 8:36 am
Okay the SOL in Texas is 4 years plus the 6 months from the date last payment made. On my credit report it indicates that the last payment was made on october 2004 b ut for $0 amount. I truely believe that the last payment was atleast a year or two before 2004. what steps should I take. Cause according to the information that i have the creditor is stil covered under the SOL.
3 Mark // Sep 8, 2008 at 11:34 am
The Gregorich court may not have been informed that there’s a good argument that SOL in Virginia for a credit card is only two years.
http://www.debt-consolidation-credit-repair-service.com/forums/showpost.php?p=962566&postcount=5
Floridians sued between the two and 3 year mark by Cap1 need to know they may have an earlier date they can use.
4 Jeff // Sep 16, 2008 at 3:32 pm
I have been looking into this same subject and found that ohio consumer attorneys love this.
BTW- IN Virginia, § 8.01-249
8. In actions on an open account, [the accrual period begins] from the later of the last payment or last charge for goods or services rendered on the account.
5 Jeff // Sep 16, 2008 at 7:23 pm
There is a good argument in Va. for the 2 year SOL.
This link has a lot of Va. info , including why you can argue the 2 year sol.
6 forest // Oct 28, 2008 at 1:19 pm
so how do you get your original card agreement if you did not save it from years ago? My guess is cap one won’t supply it
7 Frederick // Nov 5, 2008 at 10:01 pm
Actually, quite frankly, the commentary is more interesting messages themselves. (Not to insult the author, of course:))
8 B.D. // Nov 20, 2008 at 10:12 am
Kristy: I’m curious where you got the idea that the statute of limitations does not begin to run until 180 days after the debt is charged off. Generally, the SOL should start to run when the account terms are breached, which in most cases should be when the first payment due is not paid (that is, the due-date after the last payment the debtor makes). Do you know otherwise?
Forest: If you are sued over a credit card, you have the right, during that process, to request copies of relevant documents, such as the original application, the terms & conditions of the account, and copies of the account statements. If the creditor does not provide the documents you request, then the court might sanction the creditor for failing to do so (up to and including dismissing the case) and/or the court might deny the claim because the creditor cannot show the signed agreement or the statements reflecting the history of the account.
Jeff: I’m curious what makes you think that Ohio consumer lawyers love this argument. (I wholly agree that they do, I’m just wondering if you found some lawyer discussion or stash of information that might be useful to other folks in Ohio fighting with creditors.)
9 Kristy // Nov 20, 2008 at 10:40 am
There has been case law which ruled that the SOL starts 180 days after the date of last payment, some which starts date of first missed payment.
I agree it’s confusing. I always tell people to err on the safe side when calculating the SOL.
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