Credit Card Contract Law
Whether you obtained a credit card online or through an in-store application, you are legally responsible for the terms of the contract. Credit card company contracts--to which you agreed when accepting the card--give them the legal right to pursue civil action against you if you default in paying their bills.
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Payment Default
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You can be sued for not paying your credit card debt as agreed, according to the book "How to File for Chapter 7 Bankruptcy" and the "Credit Cards" website. Creditor lawsuits can lead to wage garnishments and also seriously damage your credit for seven years.
Statute of Limitations
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After a fixed period of time, your credit card company can no longer sue you but can still pursue collection of the debt through other means such as letters and repeated telephone calls. Some states like Alaska and Arizona have a three-year statute of limitations, while states such as Montana and Wyoming allow the credit card company up to eight years to sue you for unpaid debt.
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Credit Reporting Time Frame
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Regardless of what your contract says, a credit card company can only legally report negative history for seven years from the original date of delinquency, according to Experian. This federal law also applies to any collection agency a creditor may hire to pursue the debt.
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