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When does SOL REALLY start?


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OK...I've been searching for a while now. I'm trying to find out when the SOL for a credit card debt should start. Does it start from the date of the last payment? Or does it start from the day the debt is charged off? This is critical information for me as one of the dates falls within the SOL, the other one doesn't. I've found several threads that talk about this, but the information seems conflicting from different board members.

Anyone know for sure? I live in Indiana, but the debt is governed by the laws of Delaware (not sure if that matters for the purpose of this question).

Thanks!

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It is my understanding it starts the date of first delinquency from which the account is never brought current.

So roughly the date of your first missed payment

I don't suppose there is anywhere on the net I could find an "official" document that states this that I can include with my response? I haven't been able to find one thus far.

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http://articles.moneycentral.msn.com/Banking/YourCreditRating/IsThereAStatuteOfLimitationsOnDebt.aspx?page=2

this isnt a legal document, but i searched "what is a stature of limitations" in google and msn money had this article that ansewers your question on page 2

You can inadvertently restart the clock. Generally, the statute of limitations starts ticking from "date of last activity" on the accounts, said Los Angeles bankruptcy attorney Scott Bovitz. (If the account is still listed on your credit reports, the date of last activity should be noted there.) On a credit card debt, that could be the last payment you made or the last purchase you charged. But in some states, Lamb said, making a payment on an old debt, agreeing to an extended repayment plan or even acknowledging that the debt is yours can extend the statute of limitations or restart the clock altogether.

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The previous replies are pretty much correct. Let me try to put it all into context.

First, the SOL definitely does not start running when the Original Creditor "charges off" the debt. That is too late by about 6 months.

Beyond that, I believe part of the reason the answers vary is that different states define it differently. In general, it's from when the "cause of action" accrues. As ALVA says, that's generally the first time a payment was due, but wasn't made. After that, it gets fuzzy. In some states, payments that do not bring the account current do not re-start the SOL. But in other states, as hunterduke says, making a payment does re-start the SOL, and the SOL then is marked by the date of last activity. And a promise to pay may re-start it as well.

Beyond that, I offer my apologies, for I have neither the time nor motivation to become an expert in all the individual state rules.

Now I'll go read hunterduke's link, and probably find the article says all this better than I did!

Regards,

DH

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The previous replies are pretty much correct. Let me try to put it all into context.

First, the SOL definitely does not start running when the Original Creditor "charges off" the debt. That is too late by about 6 months.

Beyond that, I believe part of the reason the answers vary is that different states define it differently. In general, it's from when the "cause of action" accrues. As ALVA says, that's generally the first time a payment was due, but wasn't made. After that, it gets fuzzy. In some states, payments that do not bring the account current do not re-start the SOL. But in other states, as hunterduke says, making a payment does re-start the SOL, and the SOL then is marked by the date of last activity. And a promise to pay may re-start it as well.

Beyond that, I offer my apologies, for I have neither the time nor motivation to become an expert in all the individual state rules.

Now I'll go read hunterduke's link, and probably find the article says all this better than I did!

Regards,

DH

Thank you, thank you, thank you all! You all said it perfectly. Since I know that no payment was made past the "date of last activity" then they are outside the SOL so the debt is truly time barred. Sending off my response tomorrow, wish me luck! xdancex

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Be careful though, it may not be as cut and dried as your think.

In my state the SOL for open accounts is 3 years, so they sued me under "account stated" which is 6 years. I had to attack the account stated theory. Others have been sued under written contract, or other types of accounts that have longer SOL's as well.

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  • 1 year later...

To be frank I don't think that anyone really knows the answer. If this rule is so crucial why isn't it searchable by state on line in the Rules of Civil Procedure? As far as the "accelerated clause", to which Nascar refers, the only reference to it on a Google search is his own statement on Creditinfocetner, referred to above. This clause seems more applicable to mortgages and when you read it would seem that if it was applied to credit cards it would start the SOL sooner rather than later.

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The SOL clock starts in many states when "the cause of action accrues".

In WI, that means the day you missed 2 consecutive payments.

So the clock starts from last date of activity + approx. 60 days

I live in IL, where case law* has decided that credit card accounts fall under the five year statute of limitations for oral contracts rather than the ten year SOL for written contracts.

735 ILCS 5/13‑205 is the law for oral contracts, and it says within five years after the cause of action accrues, without defining "cause of action".

735 ILCS 5/13‑206, the law for written contracts, is within ten years after the cause of action accrues, with one VERY important difference. The ten year SOL law adds the following stipulation: "...if any payment or new promise to pay has been made, in writing, on any bond, note, bill, lease, contract, or other written evidence of indebtedness, within or after the period of 10 years, then an action may be commenced thereon at any time within 10 years after the time of such payment or promise to pay."

The five year SOL that covers credit card debt DOES NOT contain this language. It says within five years after the cause of action accrues, full stop.

I am unable to link to the statute itself, because I haven't enough posts here. But if you search for it, you'll find it.

*Illinois Appellate Court, Portfolio Acquisitions v. Feltman, No. 1-07-3004 (May 20, 2009) 3rd division

Edited by garbanzo
Adding information for clarity
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