There is a statutory limit on how long a credit card company can file a claim for an outstanding credit card balance. If the claim is not made within that time limit, the credit card company will lose the ability to collect on that debt forever. A New Jersey collections lawyer can carefully review your account and help you understand your time limit.
Six Year Limit
New Jersey, like many states, has a six year statute of limitations on claim for defaulted loans including credit card debt. This means that the credit card company must file a claim (lawsuit) to collect unpaid credit card debt within six years of when it accrued. Once the company has filed suit and properly served the debtor, they have met their obligation under the statute of limitations.
Understanding the Impact of the Filing of a Lawsuit and Entry of a Money Judgment
Remember, the credit card company must file suit within that six year statute of limitations. This does not mean they have to collect the actual money owed within six years. Once a money judgment is entered as a result of the lawsuit (and the debtor/defendant will have an opportunity to respond and be heard by the court before that happens), the credit card company no longer needs to worry about the original statute of limitations. It’s only if the company fails to file suit within the six year period that the claim is barred.
Collecting on a Money Judgment
Money judgments are good for twenty years. This means that the creditor can pursue collections on it such as wage and bank account garnishment for up to twenty years. Also, the creditor can apply for a renewal of another twenty years if there is still outstanding debt by the expiration of the first judgment.
A skilled New Jersey collection attorney can review your accounts and help you understand your options for collections. To make an appointment with a New Jersey collections lawyer for an initial consultation, contact the offices of Snelllings Law LLC at 973.265.6100.