Statute of Limitations on credit card debt in Georgia

What is the statute of limitations on a credit card debt in Georgia?

The short answer to this question is six years.  The Court of Appeals of Georgia determined that credit card agreements are contractual obligations and Georgia law provides a six year statute of limitations on lawsuits based upon contracts.  This means that starting with the date upon which you became in default on your credit card payments and you never caught up, the debt collector would have six years from that date to file a lawsuit against you and serve you with that lawsuit.  If the debt collector waits until that six year statute of limitations has passed and then files a lawsuit, the defendant then has an absolute defense against the lawsuit that the statute of limitations has passed on the debt collector’s claim.  Different states have different statute of limitations on lawsuits on credit card debt.  Unfortunately, we have seen that just because the statute of limitations has passed on some lawsuits, debt collectors still occasionally file lawsuits on the debt anyway.  In a couple of cases, the evidence that the statute of limitations on the plaintiff’s action had passed was attached the their own complaint documents!  The defense of lapse of the statute of limitations on the plaintiff’s claim is a defense that must be asserted in the Defendant’s Answer to the plaintiff’s lawsuit or the defendant risks losing the defense altogether.  With very few exceptions, even if the debt collector files the lawsuit within the statute of limitations, they must also serve it upon you within that statute of limitations period to avoid giving you the defense against the lawsuit.

If you are sued on a credit card debt after the statute of limitations has expired, this is a violation of the Fair Debt Collection Practices Act (FDCPA).  The statute of limitations on Fair Debt Collection Practices Act (FDCPA) lawsuits are short – only one year!

There is an argument that some debt collection lawsuits against consumers are barred by a different statute of limitations in Georgia that is four years.  A lawsuit based upon a “Suit on Account” has a statute of limitations of four years in Georgia.  On the face of the lawsuit you will often see the title “Lawsuit on Credit Card Account” or maybe there are different boxes that can be checked off with the options of contract or account.  It is simply the option of the debt collector filing the lawsuit which “theory of recovery” he chooses, whether an action on a contract or on an account in credit card debt cases.  The theory of recovery, generally, outlines the legal requirements for proving a claim.   Debt collectors will argue that the longer statute of limitations of six years would apply, of course, because it provides them with the largest window of time to collect on the debt by filing a lawsuit.  Without supporting case law and good evidentiary arguments, a defendant’s assertion that a four year statute of limitation should apply simply based upon the choice of the plaintiff’s action on account will likely not gain much traction.

How is the statute of limitations on legal actions on a credit card debt different from the statute of limitations for credit reporting on that debt?

Generally, the statute of limitations on the amount of time a debt can reported to your credit report is seven years.  This statute of limitations is completely different than the statute of limitations on the legal pursuit of the debt itself.  Credit reporting is governed by the Fair Credit Reporting Act, a body of federal law which decides the statute of limitations on credit reporting.  The statute of limitations on collecting debt is governed on a state by state basis.  In Georgia, a debt can be reported on your credit report for at least one more year after the statute of limitations runs out on debt collector’s right to pursue you legally for the debt. If there’s already a judgment on a debt collection lawsuit, it can be reported on your credit for up to ten years as a public record.

What if there’s already a judgment against me for the debt?  Is there a statute of limitations on that?

Once a judgment is issued in a lawsuit, the statute of limitations has no effect on how long the judgment holder can collect on that judgment.  Many people believe that even if a judgment is entered against them that its only good for the six years that the statute of limitations would apply.  This is incorrect.   The purpose of the statute of limitations is to provide for a defense to a lawsuit before a judgment is issued.  In Georgia, judgments can be renewed every seven years.  There are specific things the judgment holder must do to legally renewed the judgment and assuming the judgment is properly renewed every seven years, it could theoretically last for as long as the judgment holder continues to properly renew it.  If a judgment holder does not properly renew a judgment after ten years passes, then the judgment is finally dead and cannot be enforced against the defendant.