What Is the SOL on Credit Cards?

Jurisdiction

The state in which you reside typically governs the statute of limitations that applies. However, some credit cards' cardholder agreements contain a "choice of law" or "proper law" clause that specifies the state that has the jurisdiction regarding any debt. If your customer agreement contains such a clause, the laws of the state in which the credit card issuer is located will apply. This underscores the need for consumers to read the cardholder agreement before accepting a credit card.

Many states consider credit cards to be "open" accounts, i.e., accounts to which no promissory note or security is attached, unlike a written account that requires a written contract. State laws vary, however, and some states do consider credit cards to be written or even "oral" accounts. The definition of the credit card account matters, as it relates to the SOL time line. Open accounts generally have a shorter SOL time line than written ones, ranging from three to 10 years, depending on your state.

The SOL time line generally dictates the length of time during which the credit card company can legally enforce the debt. If the card issuer files a suit against you once the SOL has run its course, you can ask the court to dismiss the suit based on the fact that the debt is "time-barred" and the SOL on the credit card has expired. The SOL time line generally begins on the date you made your last credit card payment or the date of the last purchase you charged, whichever is later.

The SOL on credit cards, like other debts, can effectively be paused and restarted. In some states the SOL can be paused or "tolled" during times when you take up residence in another country or state, or when you're committed to a mental hospital. The SOL can also effectively be restarted from the beginning. Laws on re-aging of debt vary by state, but re-aging generally occurs when you make a new payment or acknowledge your debt. For instance, signing a promise-to-pay agreement or making a payment on a credit card account in collections re-ages the debt in many states. This restarts the SOL clock, giving the credit card company more time to legally enforce the debt.

After the SOL runs out, the credit card company still has a right to collect the debt. Since the SOL doesn't pertain to other types of collection efforts, you may still receive letters or phone calls from the credit card company. However, threatening to sue you over the time-barred account violates the Fair Debt Collection Practices Act. Since they may not be successful with a lawsuit after the SOL time period ends, you can send a "cease and desist" letter telling them to stop contacting you.