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Statute Of Limitations For Credit Card Debt

Consumer Debt Attorney In New York

According to a survey by GOBankingRates, 30 percent of Americans have up to $5,000 in credit card debt, 15 percent have between $5,000 and $10,000 in credit card debt, and 6% have more than $10,000 in credit card debt. That means approximately 14 million Americans have over $10,000 in credit card debt. So, if you are dealing with credit card debt, you may be thinking:

  • What is the Consumer Credit Fairness Act?
  • What debts does the Consumer Credit Fairness Act apply to?
  • When does the statute of limitations begin to run?
  • What are the defenses to consumer debt lawsuits?

If you or someone you know is dealing with credit card debt lawsuits, it is essential that you consult with a consumer protection attorney. Law Office of Simon Goldenberg, PLLC has much experience dealing with consumer debt on behalf of borrowers. To learn more, contact Law Office of Simon Goldenberg, PLLC for a free consultation by calling 888-301-0584 or contacting us online.

What Is The Consumer Credit Fairness Act?

On November 8, 2021, Governor Kathy Hochul signed the Consumer Credit Fairness Act (the "Act"), which reduced the Statute of Limitations on suits filed by creditors to three years. Additionally, the Act also provides the following requirements and prohibitions for debt collection:

  • Requires plaintiff creditors to include information that identifies the debt or account;
  • Establishes specific requirements for applications for default judgment, such as requiring notice by mail;
  • Requires that a plaintiff creditor provide documents including but not limited to an agreement to arbitrate, the demand for arbitration, the arbitration award, and the proof of service;
  • Requires the contract or written instrument that the action arises.

When Does The Consumer Credit Fairness Act Take Effect?

Most of the Act's provisions took effect immediately on November 8, 2021. However, the Act's Statute of Limitations provision does not take effect until April 7, 2022.

What Types Of Debt Does The Consumer Credit Fairness Act Apply To?

The Consumer Credit Fairness Act applies to most household borrowing. For example, the following debts are regulated by the Act:

  • Credit Cards
  • Store Cards
  • Store Financing
  • Payday Loans
  • Personal Loans

However, the following debts are not generally covered by the Act:

  • Mortgages
  • Household Bills
  • Tax Bills

Additionally, if someone owes money to an unregulated creditor such as a family member or a third-party private financer, it is unlikely that the Act will cover the debt meaning there is no three-year statute of limitations on unregulated debt.

When Does The Statute Of Limitation Begin To Run?

The statute of limitations is a law that sets a period that a lawsuit must be commenced. Generally, the period begins to run when the cause of action occurs or when the aggrieved party becomes aware of the cause of action.

Statute Of Limitation Defense To Credit Debt Lawsuits

In most situations, if the statute of limitation has not been tolled, once three years have passed since the cause of action arose, or the creditor learned or should have learned of the cause of action, an experienced attorney could successfully get a case dismissed based on the fact that the statute of limitations had run.

When Does The Statute Of Limitations Toll?

The statute of limitations may be tolled for various reasons, including if the borrower admits they know about the debt or made partial payments. Additionally, New York executed an Executive Order that tolled the statute of limitations for credit card debt.

Hiring A Credit Card Debt Attorney In New York

The attorneys at Law Office of Simon Goldenberg, PLLC have ample experience defending clients in consumer debt cases. If you or someone you know needs an experienced attorney, contact Law Office of Simon Goldenberg, PLLC by calling 888-301-0584 or contacting us online.