Many Americans racked up significant amounts of credit card debt during the recession and even years before then. While many have slowly been able to pay down their credit card debt, many people are still struggling with unpaid debt.
The laws regarding credit card debt can be murky, leaving many consumers to wonder if and when credit card debt expires. The good news is that Tennessee does have a statute of limitations for old credit card debt but the rules regarding debt collection by credit card companies have become complicated, resulting in many Americans still facing debt collectors despite their debt technically being expired under state law.
Tennessee has a six year statute of limitations for credit card debt. This means that unpaid credit card debt legally expires after six years, and that debt collectors cannot take consumers to court over unpaid credit card debt. While this law is supposed to protect consumers from repayment claims that are very old, credit card companies are sometimes able to get around the state's statute of limitations by using their state's statute of limitations instead.
Many credit card companies argue that they are still able to go after a consumer's old credit card debt because the credit card agreement should be honored according to their home state, not the state the consumer lives in. Depending on what state the credit card company is from, they may have a longer time period or different laws that allow them to still legally go after someone's credit card debt.
Even after credit card debt has expired, debt collectors may still come after the debtor. If the statute of limitations for credit card debt has expired, consumers cannot be legally obligated to go to court. Consumers who are being harassed or still contacted by debt collectors after their debt has expired can send a cease communication letter to the debt collector, which bars the debt collector from further activity to collect any unpaid debt under the Fair Debt Collection practices Act.
Unfortunately, many consumers still face harassment and even legal action from debt collectors despite their debt being expired under state law. Because credit card debt laws vary from state to state and credit card companies are managed throughout the country, individuals facing harassment or legal actions for unpaid debt should consult a bankruptcy law attorney to help protect their rights and prevent any further harassment.
Source: Fox Business, "Expiration Dates Fuzzy on old Card Debt," Fred O. Williams, March 25, 2013