Can One Be Sued for Past Credit Card Debt?
Unpaid credit card debt may not go away, even if you want it to. Creditors can pursue you for years for a debt. If left uncollected, the creditor may sell the debt to a collection agency and that agency will then pursue you. If you have old credit card debt that's still unpaid, it's important to understand whether you can be sued for that amount.
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Statute of Limitations
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A debtor has an obligation to pay a creditor. That obligation has an expiration date, however. Under state law, debt is governed by a statute of limitations. This statute determines how long you're legally responsible for payment of the debt. The length of these statutes vary from state to state and will differ based upon the type of credit account. In Alabama, for example, the statute of limitation on debt is six years for a written contract but only three years for open credit accounts, such as credit cards.
Considerations
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Once a debt passes the state's statute of limitations, you no longer have a legal obligation to pay it. Be careful, though, when it comes to zombie debt. This is debt purchased by collection agencies that has passed the statute of limitation. Zombie debt collectors often try to collect on unsuspecting debtors who are not aware of their rights. Such collectors may sue a debtor in court. If the debtor fails to appear and inform the court that the debt is expired, the judge will issue a default judgment against the debtor. Never ignore a court summons or collection notice.
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Consequences
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A default judgment issued against you means you are now legally responsible for the credit card debt. The debt's age no longer matters. The debt collector can pursue your assets up to the amount of the judgment against you. Depending on the laws in your state, this may include money in your bank accounts, a portion of your wages and a lien on physical property that you own, such as real estate or a vehicle.
Significance
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If you currently don't have any assets for the debt collector to pursue, you're considered judgment proof. This may not stop a debt collector from suing you for old credit card debt. The purpose of the lawsuit is to obtain the judgment in anticipation of assets you may acquire in the future. The collector will then pursue those assets. The statue of limitations on judgments -- meaning the length of time you're legally responsible for paying the judgment -- will vary by state but can be as short as three years, in Washington, D.C., or as long as 20 years, in Florida.
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