Article on limitations periods on credit card collection lawsuits

Jon Sheldon at the National Consumer Law Center discusses "Shortening the Limitations Period on Credit Card Collection Lawsuits":

With the growth of the debt buying industry, the statute of limitations has become a particularly important defense in credit card collection lawsuits. Not only do debt buyers purchase credit card debt six months or more after the consumer stops paying, but the consumer’s debt may then be sold from one debt buyer to another to yet another. Years may elapse from default to when the last debt buyer in the chain of ownership purchases the account, and then that debt buyer may take additional time after purchasing the debt to actually filing suit.

Computing when the statute of limitations on a credit card collection lawsuit has expired is a surprisingly complicated matter, offering consumer defendants a number of opportunities to challenge the collector’s calculation of the time period. This article examines recent and not-so-recent case law considering:

    • Which of a state’s statute of limitations applies—one for written contracts or one for non-written contracts;

    • Which state’s statute of limitations applies—the forum state, the state listed in the contractual choice of law, or the card issuer’s home state;

    • When does the limitations period begin—from when the consumer stopped making payments or when the card issuer later claims it has demanded full payment;

    • Under what circumstances has the running of the limitations period tolled (i.e., stopped counting for a time) or revived (i.e., started counting all over again).

The full article is here.

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