Statutes of Limitations on Credit Card Debt for Los Angeles Residents
Credit card debt can quickly become overwhelming, but it’s important to know that California has specific statutes of limitations that protect you from certain legal actions by creditors. The statute of limitations on credit card debt in California is four years, which means that creditors can no longer sue you for unpaid debts after this period. However, understanding how the statute of limitations works and how your rights are affected is essential when managing older debt.
What is the Statute of Limitations on Credit Card Debt in California?
California’s statute of limitations for most unsecured debts, including credit card debt, is four years. This means creditors or debt collectors have four years from the date of your last payment to file a lawsuit against you to recover the debt. After that period, the debt becomes time-barred, and creditors cannot legally pursue a lawsuit.
It’s important to note that while creditors cannot sue you after the statute of limitations expires, they can still attempt to collect the debt by calling, sending letters, or offering settlements. However, any threat of legal action after the statute expires is illegal.
How the Statute of Limitations Affects Debt
Once the four-year period expires, creditors lose their right to take you to court. If you are contacted about an old debt, verifying the date of your last payment is crucial to ensure the statute of limitations has passed. If it has, you can use the expired statute as a defense if a lawsuit is filed.
Restarting the Statute of Limitations: A Risk to Be Aware Of
One of the biggest risks Los Angeles residents face when dealing with old debt is accidentally restarting the statute of limitations. Any payment, written acknowledgment of the debt, or agreement to settle can reset the four-year clock, allowing creditors to file a lawsuit again. Therefore, it is essential to avoid making any payments on old debt or entering into new agreements without seeking legal advice.
Steps to Take if Contacted About an Old Debt
If a creditor or debt collector contacts you about an old debt, here’s what you should do:
- Request Validation of the Debt: You have the right to request proof that the debt is yours and that it’s within the statute of limitations. California law protects consumers from deceptive debt collection practices.
- Check the Last Payment Date: Ensure that the statute of limitations has expired before making any decisions about the debt.
- Consult a Legal Professional: If you are unsure about your rights or how to proceed, consulting with a Los Angeles credit card debt attorney can provide clarity and prevent any unintended consequences.
Can Creditors Still Contact You After the Statute of Limitations?
Yes, creditors can continue to contact you after the statute of limitations has passed, but they cannot sue you. Many debt collectors will still attempt to collect on old debts, but any attempt to sue after the expiration of the statute is unlawful.
If a debt collector threatens legal action on time-barred debt, this may violate California’s debt collection laws, and you could have grounds to file a complaint or lawsuit against them. The California Rosenthal Fair Debt Collection Practices Act offers strong protections against abusive or deceptive collection practices, ensuring that residents are not harassed over old debts.
How Bankruptcy Affects Credit Card Debt and the Statute of Limitations
For Los Angeles residents struggling with significant credit card debt, bankruptcy can provide a powerful solution. Filing for Chapter 7 or Chapter 13 bankruptcy can discharge or restructure your credit card debt, regardless of the statute of limitations.
In Chapter 7 bankruptcy, most credit card debt is eliminated, freeing you from the obligation to repay. Chapter 13 bankruptcy allows you to reorganize your debt into a manageable repayment plan, providing a structured path out of financial trouble. Filing for bankruptcy also puts an automatic stay on any collection efforts, including lawsuits over time-barred debts.
Contact Wadhwani & Shanfeld
Understanding the statute of limitations on credit card debt is essential for managing old debts and protecting your financial future. For Los Angeles residents, the four-year statute of limitations provides important protections, but it’s crucial to avoid restarting the clock accidentally.
If you’re dealing with credit card debt and need assistance navigating your rights, Wadhwani & Shanfeld can help. Our experienced bankruptcy attorneys in Los Angeles can guide you through the complexities of California’s debt laws and help you explore the best options for debt relief. Contact us today for a consultation and start regaining control of your finances.
Sources:
oag.ca.gov/consumers/general/debt-collectors
latimes.com/business/story/2021-10-26/column-debt-statute-of-limitations
