The amount of time allowed for collection activity and filing lawsuits related to credit card debt is limited in the state. There are a few interpretation rules to bear in mind when it comes to credit card debt and the statute of limitations. On a case-by-case basis, judges have the last word on the decisions regarding how to interpret the state laws. They also have the option of determining what state from which the laws will be followed. It could be either the state where the card issuer is located or the state where the consumer lives.
Statutes of limitations are in existence for the purpose of protecting consumers from claims that occur after there is no longer any evidence. It is generally three to 10 years in most states, but in South Carolina, it is just three years, according to the U.S. Federal Trade Commission. Once a debt gets beyond that time period, it is considered to be a time-barred debt.
When a consumer is sued over a time-barred debt, he or she can get the case dismissed by reminding the judge of the statute of limitations. However, some consumers will simply ignore a lawsuit when they receive notice because it involves a debt that is beyond the state SOL. This could be a mistake, since the creditor could get a judgment in court because nobody showed up to dispute the timeliness of the debt collection.
According to the federal Truth In Lending Act, credit cards are considered to be open-ended credit plans. However, state law is only concerned about the related agreements and contracts and the length of time during which they are enforceable. When a consumer is unsure of how to get out from under unmanageable credit card debt and what state law does and does not allow, an attorney could help them explore their options and deal with creditors.
Source: credit cards.com, "State statutes of limitation for credit card debt ", November 11, 2014