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Arizona State Senate Votes to Lengthen CC Coll Statute of Limitations

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Arizona State Senate Votes to Lengthen Credit Cards Collections Statute of Limitations

Source: insideARM



Arizona’s State Senate voted Wednesday (March 23, 2011) to approve a bill that would explicitly spell out the statute of limitations on credit card debt.

Credit grantors and collection agencies will now have six years to pursue Arizonans who default on the credit cards, according to the Yuma Sun see the next post).

Lawmakers said they felt compelled to step in because judges in different jurisdictions around the state were interpreting the statute of limitations for credit card debt differently.

Some read credit card debt as a revolving line of credit, which currently carries a three year statute of limitations, while some interpreted it as a contract, which carries a six year SOL.

To remove any ambiguity, the bill declares the statute of limitations on both to be six years.

The bill (House Bill HB 2412, 50th AZ Lgislature, 2011)has already passed the full House and both caucuses of the Senate.

It now heads to a full Senate roll-call vote for final passage.

While there is still opposition to the bill, it is expected to pass.

End Quote

I put these words will now have six years

in the bold italics, because CA/JDB gang celebrates to early: the bill is still not passed.

The link to HB 2412 is here:


Edited by GDayMateAZ
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Source: Yuma Sun


Arizona State senators voted Wednesday (March 23, 2011) to spell out once and for all that banks and collection agencies have six years — and not three — to pursue people who default on their credit card debt.

But the supporters say that's actually good for Arizonans. :-)

Rep. Jim Weiers, R-Phoenix, said the legislation is the result of a disagreement among various justices of the peace about the statute of limitations for collecting these kinds of debts.

He said some see these as issues of contract while others say it is a revolving line of credit. The result, he said, is that a case filed after three years might be tossed depending on how the individual JP (Justice of Peace)interprets the law.

HB 2412 (see the link in the previous post) would spell out that all credit card debts remain collectible for six years.

Senate Minority Leader David Schapira, D-Tempe, said if there is a question, legislators should err on the side of the borrowers.

Sen. Paula Aboud, D-Tucson, agreed, saying that six-year time limit does not actually help the banks that first extend the credit.

“The institution ends writing them off and then selling the debt for pennies on the dollar to these out-ofstate debt buyers. Some years later this debt buyer jumps on them for a $2,000 debt that is now $8,000 to

$10,000 because of the six-year extended period of time where the interest and fees has accumulated.”

But Sen. Linda Gray, R-Glendale, said that longer period for creditors to decide what to do can work in favor of the borrower. “It gives a chance for those who owe the debt to be able to work with the credit card company and pay off that debt.”

(continued in the next post)

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Weiers said those additional years provide the time to negotiate with the lender to settle for some smaller amount.

Schapira, however, said giving banks and collectors more time could never be seen as helping a debtor.

He said if the time limit is three years and the lender has not filed suit, then the borrower is off the hook entirely.

That possibility riled Sen. Ron Gould, R-Lake Havasu City.

He owns a business that installs and repairs air conditioning equipment.

“We need to remember on credit card debt that no one held a gun to people's heads to make them run up this debt. This is money that is owed to people.”

Gould said there are people who “use the system to get around paying you the money that they owe you.”

Schapira said shortening the statute of limitations to three years would not absolve anyone of a debt.

All it would do, he said, is assure that the lenders file the necessary legal papers within that time period or lose their right to collect.

Gray, however, said putting in the shorter deadline is a bad idea.

“The longer you wait on your debt, you don't have to pay it. And I think that's the wrong message.”

The measure, which already has been approved by the House, now needs a final Senate roll-call vote.

End Quote

Arizona Lawmakers' annual salary is $24K, and most of them are business owners.

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Geeze, this is awful.

USC, it's not awful yet.

The Bill is still in the middle of the road.

And, under A.R.S. 12-505(A), this AZ SOL change for CC debts should not be retroactive:

if someone CC default happened 01/2007, and so it was beyond "old" AZ SOL 3 years, then that CC default must be time-barred under "new" AZ SOL 6 years.

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Assume the law is effective in June 2011. If the date of default was prior to June 2008, then there is no revival. The debt is not within the statute of limitations.

This puts the statute of limitations more in line with other states, and more importantly, clarifies the statute of limitation for plaintiffs, defendants, and courts.

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Ron Gould, the typical amoral, puppet on a string, piece of garbage, politician. He postures, and might actually believe, that all credit card debt that is defaulted upon is a result of people just running up debt on purpose with the intention of not paying on it.

I'd like to take this guy on in a public forum and trumpet the fact that these CC companies often overwhelm people with their unscupulous practices. The people who get things done in this wretched system, like was done with this proposal (it has been said this is not law yet) are the ones with the unity and ability to move the politicians in the direction they want with many dollars fueling the trip.

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With all due respect, you're all wrong on this issue. The fact is that in Arizona credit cards have ALWAYS had a 6 year statute, this is a contract, and contracts in Arizona are 6 years, not 3. Some have been fortunate enough to fool unsophisticated judges that the law is 3 years instead of 6.

Open accounts are 3 years, and credit cards are NOT open accounts, this is where most people get confused because they see the word open account and say, oh, that's a credit card.

Credit cards are already defined by statute as "OPEN ENDED" lines of credit. That is NOT the same thing as an open account. See TILA - Truth In Lending Act, and you'll find that there is a definition for credit cards as open ended lines of credit. You can charge, pay it off, charge again, carry a balance. It's open ended, not open!

An open account has very little formal documentation, usually just a ledger entry. Think of it like this, you go to the general store and tell them you need supplies, put it on my account. THAT is the basics of an open account.

Credit cards are NOTHING like this. You fill out an application either online or on paper, OR possibly you received a pre-screened or pre-approved offer. Even then, you often sign and return, OR you go online to accept.

At this point there is NO contract, only an offer to enter into a contract.

It is USE of the card along with the terms and conditions that create the contractual obligation. You affirm this contract each time you use the card, whether you swipe at a gas station, OR you sign a piece of paper and/or a plastic screen at a merchant.

That is much different than a general store where you say put it on my account.

As an example... you never see people walk into a restaurant or at Best Buy walk around and hold a card in the air and say... hey, put this on my account. They make you do something, and that something is swiping the card and/or signing something... again, this is a contract, NOT an open account.

Additionally, a credit card has a LOT of federal rules that must be followed where the general store doesn't.

A credit card company must:

1. tell you your rights.

2. provide you a monthly statement when you have a balance.

3. Disclose interest rates

4. Disclose how to dispute a debt.

If you have an open account, whether it's with your general store, a local business, your car repair place, no such requirements for disclosure exist or are required, unlike a contractual obligation.

There is a maxim in the interpretation of definitions, and that is that if something has a meaning, it won't also have a different meaning. In Latin it is Inclusio unius est exclusio alterius.The inclusion of one is the exclusion of another.

If credit cards are already defined as open ended lines of credit, no matter how hard you want them to mean open account, it's just not the law.

I've read boards all over the internet, and time after time, people contend that credit cards have been found to be open accounts. This is simply not true, and no one can cite one "published" opinion in the state of Arizona that holds this to be true. Certainly some justice court judges have come to this conclusion incorrectly because we have lay justices of the peace that don't know or care to know the law. And that's okay, but it doesn't mean it's the correct interpretation.

This law does NOT change the statute, it only clarifies the law as it actually exists and has always existed. Now these Justices can't simply make this conclusion because that's what they think, it's been clarified by the statute.

The closest anyone is going to come to finding that a credit card is considered an "open account" is where the creditor owns the item until the account is paid, similar to how it used to be with Sears when you bought a washing machine. You didn't actually own the item until you paid for it. Other than that one possible carve out, I challenge anyone to find a published opinion, not a superior court case or justice court, but a published opinion in the state of Arizona that defines credit cards as open accounts. You wont find one.

And if you think you're getting out of your debt because you believe that this statute somehow changes the law, it doesn't. If you had a credit card before the law was enacted, it was a six year statute, and after this is signed and goes in effect, most likely the end of July, you still have a six year statute. All this amendment does is clarify the issue for the few JP's that have misinterpreted the intent of the legislature. Even before it goes into effect, any Plaintiff that knows what they are doing is going to point to this amendment as instructive to the judge that this is what the legislatures intent has always been.

Edited by enormousdebtor
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With all due respect, you're all wrong on this issue. The fact is that in Arizona credit cards have ALWAYS had a 6 year statute, this is a contract, and contracts in Arizona are 6 years, not 3.

Enormus Debtor,

1. Could you please elaborate, who are you working for ?

2. If there is no a contract in writing, than the contract in question is assumed as ORAL.

"A contract will only be deemed written if parties are identified and all the essential terms are in writing and ascertainable from the instrument itself. If resort to parol evidence is necessary to identify the parties or essential terms, the contract is considered an oral contract for purposes of the statute of limitations."


May 20, 2009

No. 1-07-3004

Appeal from the Circuit Court

of Cook County, Illinois


As of today,

ARS 12-543. Oral debt; stated or open account; relief on ground of fraud or mistake; three year limitation

There shall be commenced and prosecuted within three years after the cause of action accrues, and not afterward, the following actions:

1. For debt where the indebtedness is not evidenced by a contract in writing.


Edited by GDayMateAZ
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Enormus Debtor,

You have not introduced yourself on this forum.

Your CIC member profile shows, that your single (and very long) posting was made 04/07/11 when you opened your account with CIC, and you have not visited CIC after that day.

I suspect that you are CA/JDB person.

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There are many ways to prove up a contract - it doesn't have to be in writing, just evidenced by a writing. The contract is created when you use the card... look at the bottom of the next charge slip when you use your credit card, it often says something to the effect of "The cardholder agrees to be bound by the terms and conditions of the cardholder agreement" When you use your card, that's the contract... this shouldn't be that difficult of a concept to understand, unless it's your intent to charge up a lot of debt and not pay your creditors back.

Credit cards are NOT oral contracts, that you would think it is an oral contract, let me know of your success opening accounts with banks that are oral... not happening.

Again, it's use of the card in conjunction with the terms and conditions (that piece of paper you probably tossed when you received the card) that creates the contract.

Illinois can do what it wants, that opinion you site doesn't have a reporter number, so my guess is that it is not a published opinion, which would not be instructive to an Arizona court, oh... and it's an ILLINOIS case, not an Arizona one... point out somewhere in Arizona that credit cards have been held to be either an open account or a 3 year statute of limitations.

I realize that there is only a very small population of you folks that are out there trying to beat their creditors out of paying what you owe... how sad to see that you folks spend so much energy looking for crafty ways to not do the right thing. That's pretty sad. Honestly, I don't care if that's how you want to live your life. Don't be upset that I'm pointing out the truth to you.

The bottom line is that this passed, it's one the governors desk, and if she hasn't signed it already, she will likely this week.

Good luck convincing a judge now that this isn't the law. And you're argument that this is some ex post facto rule isn't going to work, so if you think you had a way out because you believe you have a 3 year statute, best of luck to you.

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Enormous Debtor,

Your opinion is the opinion of Collection/ARM industry Professional.

My purpose was to inform CIC members from AZ of coming AZ SOL change for CC (from 3 to 6 years), because IMHO AZ Governor will definitely sign this HB 2412 bill the next week.

The Illinois Case "PORTFOLIO ACQUISITIONS, L.L.C. v. Feltman" is at least a Persuasive precedent in Arizona.

I don't want to get in further discussion with you and so, I'm locking this thread now.


"The only way to get the best of an argument is to avoid it."

You can't win an argument. You can't because if you lose it, you lose it; and if you win it, you lose it...A man convinced against his will is of the same opinion still."

Dale Carnegie


It is hard to stop a quarrel once it starts, so don't let it begin.

(Proverbs 17:14 LB)


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