In California, does the 4 year SOL for written debt agreements include credit card debt?

Question

I stopped paying a credit card company approximately 4 years ago. I read that the SOL on written agreements in California is four years from the date of breach. Does this SOL cover credit card debt? Does the 4 years begin the first month I did not pay? What is considered the date of breach. If it has been 4 years, does this mean that a collection agency cannot come after the money?

Answer 1

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Answer 2

California SOL is as follows: Open Account (credit card):  4 years (2 years if not in writing)

The date of breach is once you are 30 days past due.  This only means that they (the creditor) can not seek legal action to collect in court.  They can charge off the debt on their books and sell the debt to a collection agency.  The collection agency as long as it follows the FDCPA regulations can hound you forever to try and collect.

BUT the Fair Debt Collection Practices Act DOES NOT apply to major credit card banks?   It applies only to the collection attorneys and professional debt collection companies they might hire. Original creditors are regulated by state law; however, the major credit card companies follow policies that closely mirror those of the FDCPA and will comply with your request to stop phoning you at home and work, etc., just as if you were dealing with a collection service. If you believe you have been harassed by an original creditor, or that the original creditor has done something illegal or threatening towards you, then research your state laws on the subject and contact the proper authorities to file a formal complaint. Typically, the Attorney General in your state is the proper authority to contact.

The debt however will stay on your credit report for 7  and 1/2 yrs (yes that's 7 1/2 and not 7) as per the follwoing.

Running of Reporting Period - Section 605 [15 U.S.C. § 1681c]

As of December 29, 1997 the reporting period runs 7 ½ years (7 years plus 180 days) from the date (month and year) of the last delinquency (known as "last missed payment:).

So, regardless of how long a creditor waits to charge off, sell or transfer a debt, they must report the true and correct "delinquent or last missed payment" date (month and year) that preceded the creditor's action.

3. Example after Dec 29, 1997:

A payment was due on January 10, 2000 but, you failed to make that payment and never made another payment. The Creditor waits until August 2000 to take action (charge off, send to collections, sell/transfer debt, etc.) on the debt.

The 180 day count began on January 2000, (your last missed payment month) and runs until July 2000 at which time the seven (7) year reporting period begins and runs until July 2007.

Hope this answers your question

LEGAL DISCLAIMER:  The advice contained herein is for informational purposes only.  It is not to be construed as Legal Counsel nor Legal Advice.

Answer 3

As far as the states collecting SOL:

I disagree with what was posted concerning the start date for the California collecting SOL.

It "does not" start with the first missed payment, but from the last payment or charge on the account before the account is charged off.

Note the following "with a special note to (3)":

§337. Within four years:

1. An action upon any contract, obligation or liability founded upon an instrument in writing, except as provided in Section 336a of this code;

2. An action to recover

(1) upon a book account whether consisting of one or more entries;

(2) upon an account stated based upon an account in writing, but the acknowledgment of the account stated need not be in writing;

(3) a balance due upon a mutual, open and current account, the items of which are in writing; provided, however, that where an account stated is based upon an account of one item, the time shall begin to run from the date of said item, and where an account stated is based upon an account of more than one item, the time shall begin to run from the date of the last item.

*The "last item" in (3) means the last payment or charge, not the first missed payment.



I agree with what was posted concerning the California FDCPA and the fact that the FTC FDCPA only covers collectors.

California does have it's own version of the FTC's FDCPA. Not only does the California FDCPA cover collectors but it also includes original creditors in it's laws (the only exemption for "original creditors" under the Ca. FDCPA is that they are not required to provide validation/verification)

California also has it's own version of the FTC's FCRA.

(never overlook your own states laws - in some respects they are stricter than the FTC's laws)

As far as the reporting period:

I disagree with what has been posted concerning the time being the "last" missed payment as the start of the reporting period.

The reporting period starts from the "first" time a person becomes 30 days late and the account was never brought current leading to the charge off.

The reporting time does not start with the "last" payment made on the account before the account is charged off, unless the "last" payment is the "first" payment that was 30 days late before the charge off.

For example, a person can be 30 days late on 5/5/05, then the person makes a payment "that does not" bring the account current on 6/10/05. Then the person makes no further payments. The compliance date would be 5/5/05 and not 6/10/05.

Note the following:

FCRA Staff Opinion Letter - Johnson

In sum, we believe that the phrase "commencement of the delinquency that led to the action" in Sections 605(c)(1) and 623(a)(5) of the FCRA should be construed according to its normal meaning. If a consumer falls behind on an account and never catches up, the delinquency has its "commencement" when the first payment is missed. From that point on, the account is past due and thus delinquent.

***

As for the extra 180 days, it was only allowed by the FTC because there were times when the true compliance date was unknown (due to bad record keeping by original creditors)

Note the following:

FCRA Staff Opinion Letter - Johnson

2. The additional 180 day period accords a measure of flexibility to credit bureaus whose furnishers may provide them with the wrong date. However, the expansion of the time period that Section 605 allows chargeoffs and similar actions to be reported accents the desirability of treating the "commencement" of the delinquency as the first missed payment -- not some later date that would further extend the period.

*

If a person basically knows when the 7 year reporting time limit started and it is near or at that 7 year limit, the person has every right to dispute the account as obsolete.

Just because a person may be past the collecting SOL does not mean a collector may not "try" to sue, even though it is a violation.

If a collector does sue on a time barred debt, it would be up to the defendant to include an affirmative defense of SOL in with their answer and, if they choose, to file a counter claim for the collectors violation of filing suit on a time barred debt.