What is the Statute of Limitations on a Credit Card Debt in Arizona?

This question is more tricky than it might first seem. I meet with a lot of people who have been sued by one of the big debt buyers (i.e. Midland Funding, Portfolio Recovery, Unifund, CACH, LLC, etc.) who think that they are going to win their debt collection case easily because the statute of limitations has expired.  The confusion in this area stems from the fact that Arizona law changed a few years ago to extend the time in which a credit card company (or someone who is claiming that they bought a credit card debt) can file a lawsuit.

The Old Arizona Law

Here is what the law used to be:

Oral debts, stated or open account = 3 year statute of limitations

Written contract = 6 year statute of limitations

The confusion stemmed from the fact that credit card accounts could be considered a “stated or open account” and thus subject to the three (3) year statute of limitations but at the same time could be considered based upon a written contract and thus subject to the six (6) statute of limitations.  So which is it?

2011 New Law is Passed

The Arizona State Legislature addressed this issue in 2011 when it amended A.R.S. 12-548 to state that any debt founded on a credit card would be subject to the six (6) year statute of limitations.  So basically any credit card lawsuit must be brought within six (6) years from the time the account went into default otherwise it will be barred forever.

When Does the Clock Start Ticking?

The statute of limitations begins to run when the account goes into default.  Basically if the creditor was legally justified under the terms of the contract to file a lawsuit against you then the clock has started.  In most credit card cases this occurs 30 days after you stop making payments on the account.

In my experience most of the large debt buyers that file lawsuits usually know approximately when the statute of limitations is about to expire and they seem to file those lawsuits prior to its expiration.  Not always, but most of the time.

The good news is even if you don’t have the statute of limitations defense you are still in a good position to win your case.  Debt buyer cases are very winnable if you make the right arguments and participate in the process.