Read on, anyway.

1. True or False? The Statute of Limitations limits the period of time a creditor can collect an unpaid credit card debt.

False.

It limits the time a creditor can file suit to collect an unpaid credit card debt. Collectors can request voluntary payment until the day you die….or pay off the debt. Request, that is. Suggest. Point out the psychic benefits of paying your debts. Ask, if you will. Beg, even. But under no circumstances can they threaten legal action, bank levies, wage garnishment or jail. Even so, “post-statute” collection calls can get pretty rough, since the collectors have no legal recourse if you decline their offer to accept payment.

2. True or False? For a credit card collection lawsuit in California, the statute of limitations is always four years.

False. The boilerplate contracts which the banks enclose with your new credit card, have a “Choice of Law” provision. This provision identifies the state whose law governs the contractual relationship between the credit card issuer and the credit card holder. A number of these Choice of Law provisions select, as the controlling law, the laws of such states as Delaware [Chase, Bank of America]; Virgina [Capital One]; and, New Hampshire [Providian]. In each of these states, the applicable limitations period is three years. Continue reading →