Credit Card Debt and Statute of Limitations in New Jersey

Credit card debt is one of the most pressing financial concerns for many New Jersey residents, many of whom continue to struggle with managing debt incurred during the financial downturn of 2008 and the surrounding difficult years.

If you have fallen behind in your credit card payments, the stress of knowing that you owe significant debt is only magnified by the collection efforts of credit card companies and collection agencies.

If you are seriously behind in credit card payments and unable to satisfy the debt, however, it is important to understand the rules governing credit card debt and statute of limitations in New Jersey. An experienced credit card debt lawyer could explain the rules that credit card companies and collection agencies are required to abide by in attempting to collect an older debt.

New Jersey Statute of Limitations for Credit Card Debt Collections

A statute of limitations is a state-prescribed rule that limits the timeframe during which a lawsuit can be brought against an individual. The generally applicable statute of limitations on collecting credit card debts in New Jersey is six years. This means that, after six years have expired without any activity relating to the credit card debt, the creditor can no longer sue the debtor in court to obtain a judgment on the debt.

It is important for debtors to understand that, under a fairly new 2016 New Jersey court case, the statute of limitations on certain credit card debts in New Jersey was reduced to four years. The court case covers retail credit card debts, such as the debt incurred on a credit card that is only accepted in a specific store, rather than a Visa or Mastercard that is generally accepted for payment.

The statute of limitations on credit card debts in New Jersey runs from the last date when any activity relating to the debt occurred. This means that making a payment on the credit card debt, or even reaffirming the debt verbally, will reset the clock on the statute of limitations.

What Happens if a Creditor Continues Collection Attempts Beyond Expiration of the Statute of Limitations?

The six-year statute of limitations for collecting credit card debt in New Jersey does nothing to prevent creditors and collection agencies from continuing efforts to collect an old debt. The creditor can continue to send letters and make phone calls, and the debtor remains responsible for the debt.

However, once the statute of limitations has expired in New Jersey, the creditor cannot successfully bring a lawsuit to enforce the debt. Expiration of the statute of limitations period also has no impact on a debtor’s credit rating. Credit rating agencies adhere to a different timeframe in determining whether an old debt will impact a debtor’s credit score, and this is in no way tied to New Jersey’s statute of limitations period.

Contacting a Reputable Credit Card Debt Attorney for Guidance

Although the generally applicable New Jersey statute of limitations for collecting on credit card debt is six years, it is important to examine the agreement with the credit card company to determine which state’s law will govern.

Many credit card agreements are governed by Delaware law, which imposes a shorter statute of limitations period. An attorney can help you determine the statute of limitations that will apply with respect to your particular credit card debt.

The rules governing credit card debt and statute of limitations in New Jersey debt collection cases can be confusing, making the advice of a skilled attorney especially valuable if you are behind in your credit card payments.