How Long Can a Credit Card Company Collect a Debt?

If a credit card is in default, the company has the right to file a lawsuit against you to obtain a judgment and collect payment for the debt. However, like most legal actions, there is only a limited amount of time in which credit card companies can file a claim. Every state has different statutes of limitations for legal cases and California is no different.

The Statute of Limitations in California

When you obtain a credit card or another type of debt, you will likely have to sign a written contract stating you will make payments until the debt is paid off. If you fail to pay the debt as agreed, you may be considered in breach of the contract.

Because the creditor-debtor relationship is contractual, the statute of limitations for breach of contract claims applies. In California, this time limit is four years. If you have a debt that is based on an oral contract, the statute of limitations is two years.

The statute of limitations starts “running” the date you breach the contract, which is usually when you miss the first payment. Note that if you catch up on your payments, the statute of limitations stops running and will start over the next time you miss a payment. If the credit card company already closed your account, the statute of limitations will not reset if you make a payment, however.

If a credit card company files a lawsuit after the statute of limitations expires, you should contact an attorney immediately. A lawyer can request that the court dismiss the action, as well as work to hold the credit card company liable for violating consumer protection laws.

Contact a Consumer Protection Lawyer in Los Angeles Right Away

The Los Angeles consumer law attorneys at Martin & Bontrager defend against many types of credit card lawsuits for our clients. Call 323-940-1700 or contact us online to discuss how we can help you.