Credit Card Debt and the Statute of Limitations in Illinois
Statutes of limitations are used by all states to prevent legal action
on claims that have become old or "stale." A state may have
dozens of different statutes of limitations applying to hundreds of different
types of claims.
For credit card debt in Illinois, there was some question as to which of
two possible statutes of limitation could have applied. In 2009, the Appellate
Court of Illinois answered the question, applying 735 ILCS 5/13-205's
five-year limitation period to credit card debt.
Why Are Statutes of Limitation Important?
If the statutory period has expired on a debt, a debt collector can still
call and ask you to pay the debt. However, they can no longer sue in court
and obtain a judgment against you.
If they do sue, and you receive notice, don't ignore it. If they sue
and you fail to show up and assert your rights by providing evidence to
the court that the claim is time-barred (expired), the court may not know
that the claim is time-barred. It may then grant the debt collector a
judgment (known as a default judgment).
While the original debt may have expired, the default judgment "revives"
the dollar amount of the debt you owe (not the actual debt) and creates
a new obligation â the judgment â so it is vital that
you respond to any court notice. If you aren't sure what the document means, a
Chicago bankruptcy attorney experienced in handling collection matters can help.
You should not make any payments on old debts that you believe to be more
than five years in age. By paying on the debt, you acknowledge it. Acknowledgment
of an old debt can revive the debt and restart the statute of limitation clock.
Debt Collection: Big Business
As the Illinois appellate court noted, the buying of old debts for collection
had grown to a $110 billion business in 2007. Half of the 158,152 debt
collection cases filed in Cook County were by debt collection agencies.
Portfolio Acquisitions case, the Appellate Court listed the seven different entities who had
handled some of the collection process on the debt. Given the volume of
transactions and the number accounts, it is inevitable that errors will occur.
If you had old debts or have received collection notices or calls concerning
debt that may not be yours, you may want to speak with an attorney, as
failing to act â or taking the wrong actions â could leave
you liable for a previously time-barred judgment.