Statute Of Limitations On Credit Card Debt - Which State Law Applies?
Our friend Jay Fleischman of the New York Consumer Litigation Blog points out something that is rarely discussed in collection suits over credit card debt - which state statute of limitation law applies when a credit card company (or debt buyer) sues you?
Here is the heart of the matter according to a recent court decision out of Florida:
In the recent case of Capital One Bank USA, NA v Gregorich, one court in Florida has hit the nail on the head by saying that the statute of limitations is governed by the Cardmember Agreement between the consumer and the credit card company.In the Gregorich case, Capital One began a lawsuit about 3 1/2 years after the date of default. The Customer Agreement (Capital One’s term for Cardmember Agreement) specifically stated that it would be governed by Federal and Virginia law. The relevant statute of limitations in Virginia was deemed to be 3 years because the Agreement did not qualify as a “written contract” governed by the 5 year Virginia Statute of Limitations.
End result? Capital One loses.
Your lesson? Always check the Cardmember Agreement to determine the appropriate statute of limitations.
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