What Is the Statute of Limitations on Credit Card Debt in Kentucky?
The statute of limitations is a legal concept that acts as a bar to bringing a civil action after the expiration of a specified period of time. Each legal cause of action has a specific limitations period established by state statute. Once the limitations period has run, an action filed after this date is said to be “time-barred” and upon motion of the defendant, the court must dismiss the plaintiff’s lawsuit.
Other People Are Reading
-
Identification
-
Since the relationship between a credit card company and its cardholders is based on a binding contract, the specific statute of limitations period for recovering credit card debt is determined by the limitations period established for breach of contract actions. Once the period for bringing a credit card action has expired, a debtor could raise the statute of limitations defense in court, and any lawsuit filed by the credit card company would have to be dismissed.
Kentucky Statute of Limitations
-
Pursuant to Kentucky Revised Statutes §413.120, an action to recover for breach of contract (referred to in the statute as a merchant account) must be commenced within five years after the cause of action has accrued. A cause of action accrues or commences when the events or circumstances that gave rise to the suit occurred. In general, for purposes of computing the statute of limitations, the period commences from the time when the account was either in default or was written off by the creditor.
-
Features
-
The statute of limitations is an affirmative defense that a debtor must raise to the court at the time a complaint is filed against him by the credit card company. If the time period (five years) for the underlying breach of contract action has expired or run out when the complaint is filed, under Kentucky law, the statute of limitations operates as an absolute bar to bringing the case and the lawsuit must be dismissed by the court.
Misconceptions
-
It is important to note that the statute of limitations period for credit card debt does not extinguish the debt; it only precludes a creditor from ever bringing a lawsuit against a debtor for enforcement of the default balance owed. Agents of the creditor can continue to make collection calls even though any legal action to recover the debt has been time-barred.
Effects
-
Once the statute of limitations period has expired for bringing a breach of contract action for the balance owed on a credit card balance, the creditor is absolutely barred from filing a lawsuit against the debtor. If a lawsuit is filed outside the permissible Kentucky time period for such actions, a debtor must affirmatively raise the statute of limitations defense in his answer to the creditor’s complaint.
-
