Indiana Credit Card Debt Laws
Credit card limitations vary from state to state, and the laws often change. As of January 2010, Indiana maintains a six-year statute of limitations for credit card debt. What this means is that a company has six years to sue for unpaid debt, after that the debt becomes a time-barred debt.
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State and Federal Law
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The Credit Card Reform Act of 2009, the first piece of national credit card legislation in more than 30 years, serves to protect consumers from double-cycle billing, excessive fees, and retroactive interest rates. This law added many restrictions to debt collection and credit card companies operating in Indiana or serving its residents. Indiana maintains its own credit law, in conjunction with the recent federal act. The Indiana Uniform Consumer Credit Code, IC 24-4.5 controls how much an individual can be charged for credit, restricts penalties and other adverse effects of paying late, and specifies what must be provided to the consumer concerning any debit transaction.
Credit Rights in Indiana
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Obviously a consumer must pay back a debt, but debtors also have rights and protections. They must know the cost of the debt upfront, so that they may opt out or find a better deal. Interest rates may not exceed those set by current law, consumers may refuse to purchase credit from a vendor, and they can cancel some door-to-door contracts and some real estate dealings.
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Time-barred Debts
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According to the Federal Trade Commission, a debt collector (a company or individual) may not sue on a time-barred debt. A key fact to remember is that often state laws use loose terms like “open accounts” or “owed monies” instead of specifically stating the law as a credit card debt. These wordings are meant to cover a broad range of debts, and they also stem from the laws before credit cards became the normal mode of payment.
Re-aging Debt
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Even though debts have a time limit, if a consumer makes a payment, companies will often restart the time line. They do this so that a consumer is held responsible for the debt for as long as possible. Accordingly, if a consumer has an old debt it is often advantageous for him or her to ignore it or ask for verification of the bill.
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References
Resources
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