In the last two years that Credit Card companies have been aggressively filing lawsuits on old credit card debt. One of the important things a consumer should know is that there are laws to protect them from these lawsuits.
In Kentucky, a credit card debt is an open account, or merchant account. The statute of limitations for filing an action on these accounts is five years. However, every time a consumer makes a payment the five year statute start again. The Kentucky Revised Statutes 413.120 (10) governs open accounts.
Also, in Kentucky once a credit card company sells your account to a third party collection agency the debt then becomes a “bill of exchange” under the uniform commercial code. The statute of limitations for an action on a bill of exchange is 5 years. KRS 413.120(8) governs bills of exchange or promissory notes that are place on the footing of a bill of exchange.
If you get sued by a credit card company or any debt collector, you should make sure you file an answer to the suit within 20 days! Do not give up and let them have a default judgment.
- Understanding The Statute Of Limitations On Debt (creditscore.net)
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