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Credit Card Debt: Lawsuits, Procedures And Payment
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Credit Card Debt: Lawsuits, Procedures And Payment

Old credit card debts have to be settled right away otherwise, it can cause negative impact on your credit score and history. Worse, creditors could file a credit card lawsuit if the debt is not repaid for long periods. The good news is, it is possible to repay old credit card debts and still have enough money for saving up. However, depending on the total amount of money you owe and the type of debt, such process will take time.

Before you start debt repayment, it’s important to know more about the credit debt laws in place in your state. There are different provisions in old credit card debt laws and to protect yourself from abusive debt collectors, it is important to familiarize yourself with local and federal debt laws and consumer rights laws. Below are factors you need to know about credit card lawsuits, and debt laws:

Statute of Limitation

Creditors, debt collectors and debt collection companies are only given a limited period to collect debts from consumers. The limit, known as the Statute of Limitation, is imposed on each state and the numbers of years wherein creditors can pursue debtors vary from state to state. If a debt is beyond the state’s statute of limitations, they can no longer collect the debt, including filing a credit card lawsuit. Statutes of Limitation generally vary from three to ten years.

Time-Barred Credit Card Debts

If a credit card debt is over the limit, the debt becomes time barred and creditors can no longer challenge the debtor in the court of law. This means, a credit card lawsuit filed against you for a time-barred debt will be dismissed by the judge.

Legal Process

Your creditor may file a civil case against you but only within the jurisdiction where you signed the agreement or where you live and not any other state that the creditor wants unless the agreement has a clause that indicate laws governing the home state of the creditor will determine the course of action to do so.

Time Frame

Note that if the creditor won the credit card lawsuit, bad marks on your credit will remain in your record for at least seven years. After seven years, the bad marks should be off your record. As for those who filed for bankruptcy, the bad marks could remain in their record for 10 years. Note that the Statute of Limitations and credit reporting are two entirely different things so it is important to familiarize yourself with both once your creditor files a credit card lawsuit against you.

Debt Re-Aging

Some creditors and junk debt buyers may attempt to re-age out of statute debts just so they can file a credit card lawsuit against debtors. If you suspect that your accounts have been re-aged, make sure to request your credit report, gather all receipts and compare those with the time, date of the purchases that led to the debt in dispute. If you see discrepancies on both records, report it immediately. In addition, do not pay debts that are nearing the statutes of limitations. So it’s best to not pay old debts to avoid offsetting the statute of the debt as this will give creditors another chance of collecting the money.

The Fair Debt Collection Practices Act

Note that certain laws are in place to protect consumer rights against abusive creditors or junk debt buyers who use intimidation and unsavory language to collect debts. Note that creditors cannot threaten you with a credit card lawsuit if they do not have plans of following through with the threat. Apart from credit card lawsuit, creditors, junk debt buyers and debt collection companies cannot call you at any time they choose; they cannot threaten you with jail time, arrest, property lien, wage and bank account garnishment unless they pressed charges, won the credit card lawsuit and are authorized by the court of law to do so.

Additionally, creditors can never talk to third parties about confidential information about your debt nor can they mar your reputation publicly. It is also important to contact a consumer debt attorney if you feel that your rights were violated by a collection agency or original creditor.

Debt Repayment

Whether or not the creditor filed a credit card lawsuit, it is important to find ways to repay the debt. Start by checking your credit report and checking the information thoroughly. Create a list of creditors that you owe money to and include the due dates and amount. For out of statute debts, you don’t need to worry as much because creditors can no longer pursue a credit card lawsuit if the debts are well beyond the statute of limitation. However, keep a wary eye on debts nearing its statutes as creditor might pull a few strings to re-age your debt.

Finally, don’t wait until your creditor files a credit card lawsuit. Save yourself the trouble of incessant collection efforts and talk with your creditor, propose a sound repayment plan and stick with that.

Street Talk

Knowing the law is a good protection for all of us. We have rights and responsibilities! Good job on an important topic.

  about 9 years ago
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