Can I Be Sued for Old Credit Card Debt?

This article is for educational purposes only and is not legal advice. ProveItToolkit.com is not a law firm and does not provide legal services. For advice about your specific situation, talk to a licensed attorney in your state.

Yes. You can be sued over a credit card you stopped paying years ago. It happens every day, and if a summons just showed up at your door over a debt you barely remember, you are not imagining things and you are not alone. A summons is the court paper telling you a lawsuit has been filed against you and that you have a limited time to respond.

Here is what is going on, in plain words.

Why is someone suing me over a debt this old?

When you stop paying a credit card, the bank does not just forget about it. After a period of missed payments, the bank writes the account off as a loss on its books. That step is called a charge-off, and it is an accounting move, not a cancellation. A charged-off debt is still a debt.

After the charge-off, banks often sell these accounts to companies called debt buyers. A debt buyer is a business that purchases old debts for a small fraction of what is owed and then tries to collect the full amount. A 2013 Federal Trade Commission study of the debt buying industry found that buyers paid an average of about four cents for every dollar of debt they bought, and that older debts sold for even less than newer ones.

Debts can also be resold from one buyer to another, sometimes more than once. That is why the company suing you may be one you have never heard of and never did business with.

Is there a time limit for suing me?

There is, and it is called the statute of limitations. That is the legal deadline for filing certain kinds of lawsuits. Each state sets its own deadline, and it can also depend on the type of claim. In many states the limit for credit card debt falls somewhere between three and six years, and in some states it is longer. A debt that is past the deadline is called time-barred.

Here is the part that surprises people. A lawsuit filed after the deadline does not stop itself. Courts often will not check the age of the debt on their own. The time limit works as a defense, which means a reason the person being sued raises in court for why the company should not win. If nobody raises it, the case can move forward as if the deadline did not exist.

This is not a small or theoretical problem. In 2015 the Consumer Financial Protection Bureau, the federal consumer watchdog, took action against two of the largest debt buyers in the country, Encore Capital Group and Portfolio Recovery Associates. The orders required them to stop suing or threatening to sue on time-barred debt and to refund tens of millions of dollars to consumers.

Whether your debt is time-barred depends on your state's rules and the facts of your account. A licensed attorney in your state can tell you where your case stands.

Can a payment restart the clock?

In some states, yes. Making even a small payment, or admitting in writing that you owe the debt, can restart the time limit in those states. This is one more reason the rules of your own state matter so much, and why it helps to understand your situation before you respond to collection calls about an old debt.

The credit report clock is a different clock

People often mix up two separate time limits. The federal Fair Credit Reporting Act, the law that governs credit reports, limits how long a charged-off account can appear on your report, in many cases about seven years. That clock has nothing to do with the deadline for suing you. A debt can fall off your credit report and still be inside the window for a lawsuit, and a debt can be too old to sue on while still showing on your report. One clock does not tell you anything about the other.

Old debt comes with proof problems for the company suing you

The company that filed the lawsuit is called the plaintiff, and the plaintiff has the burden of proving its case. With an old, resold debt, that can be harder than it sounds. The plaintiff needs to show that it actually owns your specific account and that the amount it claims is correct.

The paper trail showing each sale of the debt, from the original bank through every buyer down to the company suing you, is called the chain of title. Every resale is another link that has to be documented. The same 2013 FTC study found that debt buyers often received very little of the underlying paperwork, such as account statements, when they bought the accounts.

None of that means a case is automatically weak. It means the age and resale history of a debt raise real questions, and the plaintiff is the one who has to answer them.

What happens if I ignore the lawsuit?

The worst thing to do with a summons is nothing. If you never respond, the court can enter what is called a default judgment, which is a ruling against you made simply because you did not show up or answer. Once a company holds a judgment, it can often use court tools to collect, and depending on your state's rules those tools can include wage garnishment, which means taking part of your paycheck, or taking money from a bank account. State laws on this vary a lot, and some states limit these tools, but a judgment is a serious thing in every state.

An old debt does not become a small problem just because it is old. Ignored, it can turn into a judgment that follows you for years.

What is my deadline to respond?

Your deadline is printed on the summons itself. Deadlines vary by state and by court, so do not rely on any number you read online, including here. Read your summons carefully. It tells you which court has your case and how long you have.

What you can do now

Read every page you were served. Keep it all together. Learn how debt buyer cases actually work, because the process is far less mysterious than it looks from the outside. And for decisions about your specific case, including what to file and when, talk to a licensed attorney in your state. Many offer free consultations, and legal aid organizations help people who qualify.

If you want to understand the process before you spend a dime on anything else, the $47 kit at ProveItToolkit.com explains in plain English how debt buyer lawsuits work, what terms like chain of title and time-barred really mean, and what the road ahead looks like. Pick the company suing you from the list on the homepage to get started.

Being sued over an old debt is frightening, but a lawsuit is a claim, not a verdict. The company suing you still has to prove its case.