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Statutes of limitations and credit card debt

For Pennsylvania debtors, the statute of limitations on unpaid credit card debt may come as a welcome relief. Statutes of limitations prevent debt collectors from filing civil lawsuits against a debtor beyond the time period set forth therein. Debtors should be aware, however, that the statute of limitations does not prevent the creditor from seeking to collect on the debt in other ways.

Under Pennsylvania law, creditors must file lawsuits against debtors who are delinquent on their credit card debt within four years. Many companies will try to get debtors to make a single payment within that time, as any activity will restart the clock. Thus, debtors who are close to the statutory time-bar might consider not paying anything no matter what the offer might be.

In many cases, credit card companies will make settlement offers on unpaid credit card debt as the statutory time period draws closer. While such offers may seem like a good idea, people should understand that by accepting them, they risk incurring tax liability on the canceled debt amount. Creditors may also try to file a lawsuit prior to the end of the statutory time period. If they do so and are able to secure a judgment, the debtor's wages and bank accounts may be subject to garnishment or levy.

When people owe a significant amount of delinquent credit card debt, it may be a better option for them to consider filing for bankruptcy. Filing halts all collection activities, and companies who violate that provision and attempt to collect on the debt following a discharge can be held to be liable by notifying the bankruptcy court. Bankruptcy may be able to provide people with a fresh financial start.

Source:, "State statutes of limitation for credit card debt", Connie Prater and Fred O. Williams, November 15, 2014

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