Expert: Chris Ebert - 5/9/2010

Question
I have been doing a lot of research since I was recently contacted by a debt collection law firm concerning an old credit card debt.  I have an old credit card debt that has been passed around to several collections companies.  I am trying to figure out if my debt is time-barred or not.  I have not made any payments on the card since November 2005.  I am familiar with the Texas Practices and Remedies Code 16.004(a)(3), and it says that the 4-year statute of limitations begins the day the cause of action accrues.  What does that mean?  I saw on BudHibbs.com that in Texas, the statute begins to run as soon as you miss your first payment and continues to run unless you agree in writing to pay, which will start a new 4 year statute of limitations period.  Is that correct?  So, the major problem I am having is trying to discern when the Texas statute of limitations begins to run.  If it does begin as soon as I missed my first payment and never brought the account current again (November 2005), does that mean my debt is time-barred?

Thanks

Answer
Jen,

I have always learned from my attorneys that in most cases the statute runs from the date of last payment. First delinquency is usually within 30 days of that. I have heard that clever attorneys may have made successful arguments in court that can move the date around a little.

In short, I think that a November 2005 debt is out of statute. It does not mean that they can not sue you, it means that statute of limitations is your defense if they do.

They can report the debt for another two years on the credit report (7.5 years of reporting according to FCRA)

Disclaimer: I always encourage consumers to settle with creditors that they know that they owe money to.

Chris Ebert
http://www.henleycreditlaw.com