Statute of limitations on credit card debt

Under Texas law, the statute of limitations on a credit card debt is four years from the last payment. If the lawsuit is not filed by this deadline, the statute of limitations can be raised as a complete defense to the lawsuit. But you have to plead this affirmative defense. You have to raise this as a defense in your answer to the lawsuit, and you have the burden of proof. Sometimes you'll find the evidence in the plaintiff's own documents or even in their pleadings. Other times you'll have to prove it from your own documents and testimony.

Tex. Civ. Prac. & Rem. Code §16.004(a)(3) establishes a four year statute of limitation on an action for a debt, and the four years starts running from the day the cause of action accrues. In a breach of contract case, the cause of action accrues at the time of the default. Jones v. Blume, 196 S.W.3d 440, 446 (Tex.App.--Dallas 2006, pet. denied). If the debt action is on an open or stated account, the cause of action accrues on the day of the last payment by the debtor. Livingston Ford Mercury, Inc. v. Haley, 997 S.W.2d 425, 429 (Tex.App.--Beamont 1999, no writ.), Tex. Civ. Prac. & Rem. Code §16.004(c).

But it gets better.

If a debt collector files a lawsuit against a consumer to collect on a credit card debt after the statute of limitations has run, and if the debt collector knew or should have known it was past the statute of limiations, this is considered to be an unfair and unconscionable practice. It is a knowing and intentional violation of 15 U.S.C. § 1692f of the Fair Debt Collection Practices Act (FDCPA). Kimber v. Federal Financial Corporation, 668 F. Supp. 1480, 1487 (M.D. Ala. 1987).

In such cases, I file a counterclaim for violation of the FDCPA and seek damages and attorney fees. When we can prove the statute of limitations and a violation of the FDCPA, the end result is that the debt collector's case is dismissed and the debt collector has to pay damages and attorney fees.