Jump to content

RRog

Question About the Statute of Limitations

Recommended Posts

I am in South Carolina and my question is about when the statute of limitations starts on a credit card debt.  The statute of limitations for contracts is 3 years but I can’t find anything that says when that 3 years starts.  

Share this post


Link to post
Share on other sites

Posted (edited)

What did I do wrong?   Why does it have to be approved?

Edited by RRog

Share this post


Link to post
Share on other sites

You are new,  When you reach member status you have full posting rights and your posts are immediately visible.

Welcome to CreditBoards.

Share this post


Link to post
Share on other sites
4 hours ago, RRog said:

I am in South Carolina and my question is about when the statute of limitations starts on a credit card debt.  The statute of limitations for contracts is 3 years but I can’t find anything that says when that 3 years starts.  

Unless SC has some squirrel clause, the limitations expiry would begin ticking when the cause of action had accrued, in other words...the point at which you defaulted on the account by missing a payment and never again becoming current. 

Share this post


Link to post
Share on other sites

https://whychat.me/States/state-sc.html

 

S.C. Is one of the few "last action" ( AKA "squirrel clause") accrual States. This means the SOL starts when the last action of either party occurs. Your last payment on an active usable account or the last charge made whichever was last.

 

 

Share this post


Link to post
Share on other sites
4 hours ago, Why Chat said:

https://whychat.me/States/state-sc.html

 

S.C. Is one of the few "last action" ( AKA "squirrel clause") accrual States. This means the SOL starts when the last action of either party occurs. Your last payment on an active usable account or the last charge made whichever was last.

 

 

 

So, if I follow you correctly, that would be more advantageous to the cardholder.  No?

Share this post


Link to post
Share on other sites
4 hours ago, Why Chat said:

https://whychat.me/States/state-sc.html

 

S.C. Is one of the few "last action" ( AKA "squirrel clause") accrual States. This means the SOL starts when the last action of either party occurs. Your last payment on an active usable account or the last charge made whichever was last.

 

 

You are referring to a mutual, open, and current account.  There is no S.C. case law that supports the “last action of EITHER party” claim in regard to credit card debt. 

 

For that claim to apply to a credit card debt, it would mean that the last action could be taken by the credit card company.  I know of no state that has ruled that the SOL on credit card debt begins when a credit card bank charges a late fee or finance charge. 

 

Unless a late fee or finance charge can start the SOL, a mutual, open, and current account does not apply to credit cards. 

 

In SC, the SOL begins at the date of last payment or charge.  It is not based upon the actions of EITHER party. 

Share this post


Link to post
Share on other sites
8 minutes ago, Bluesie58 said:

You are referring to a mutual, open, and current account.  There is no S.C. case law that supports the “last action of EITHER party” claim in regard to credit card debt. 

 

For that claim to apply to a credit card debt, it would mean that the last action could be taken by the credit card company.  I know of no state that has ruled that the SOL on credit card debt begins when a credit card bank charges a late fee or finance charge. 

 

Unless a late fee or finance charge can start the SOL, a mutual, open, and current account does not apply to credit cards. 

 

In SC, the SOL begins at the date of last payment or charge.  It is not based upon the actions of EITHER party. 

 

What does this mean?

 

"the cause of action accrues from the time of the latest item proved in the account on either side"

Share this post


Link to post
Share on other sites
On 9/27/2009 at 1:37 PM, Why Chat said:

You are correct, SC has a 3 year SOL

http://whychat.5u.com/States/state-sc.html

It is also a "last item" State;

Quote

S.C. IS A "LAST ITEM" SOL ACCRUAL STATE.
In an action brought to recover a balance due upon a mutual, open and current account, where there have been reciprocal demands between the parties, the cause of action accrues from the time of the latest item proved in the account on either side. (C.C.P., s. 39; Code, s. 160; Rev., s. 376; C.S., s. 421; 1951, c. 837, s. 1.)

On 9/27/2009 at 1:37 PM, Why Chat said:

 

That means the starting date of the 3 year SOL ( accrual date) is from the last "item" i.e. payment or charge on a mutual, open and current account, This would be the last time you paid on the account, WHILE YOU COULD STILL USE IT and it was NOT late or past due, or the last CHARGE you made on the account, whichever was later.

 

If the date of obsolescence on your account is Jun 2012. , that means the first default date was June 2005, your actual accrual ( starting date) of your SC SOL is probably May 2005, or earlier if you were making payments but could not use the account.

 

Share this post


Link to post
Share on other sites
Posted (edited)
1 hour ago, PotO said:

 

What does this mean?

 

"the cause of action accrues from the time of the latest item proved in the account on either side"

Notice the phrase “on EITHER SIDE”.   The credit card bank is the other side.  That means that the SOL could begin based upon an item posted by the credit card bank.  

 

Should the SOL begin when the last item is a late fee or finance charge posted by the creditor?

Edited by Bluesie58

Share this post


Link to post
Share on other sites
1 hour ago, Bluesie58 said:

Notice the phrase “on EITHER SIDE”.   The credit card bank is the other side.  That means that the SOL could begin based upon an item posted by the credit card bank.  

 

Should the SOL begin when the last item is a late fee or finance charge posted by the creditor?

Ok, now I'm more confused.

 

"You are referring to a mutual, open, and current account.  There is no S.C. case law that supports the “last action of EITHER party” claim in regard to credit card debt."

 

A credit card account is mutual.  Mutual means two parties in agreement to open an account, right?  Open and current means the account is not closed and not in default.  Sounds like a credit card account to me. 

 

"For that claim to apply to a credit card debt, it would mean that the last action could be taken by the credit card company.  I know of no state that has ruled that the SOL on credit card debt begins when a credit card bank charges a late fee or finance charge."

 

We are not talking about "no other state".  Only SC.   

 

"Unless a late fee or finance charge can start the SOL, a mutual, open, and current account does not apply to credit cards."

 

By definition, it's impossible for your account to be current if there's a late fee.  Late is the antonym of current.  Now, if you bring the account up to date, then the creditor cannot sue you and the SOL is never brought into play.   

 

"In SC, the SOL begins at the date of last payment or charge.  It is not based upon the actions of EITHER party."

 

So why did you say in the quote box, "Notice the phrase 'on EITHER SIDE'” ??  So is it EITHER side or is it EITHER side.  "Either" does not mean other.  "Either" means any side that is party to the account agreement.  In other words, EITHER you or the bank.  

 

And to answer your question ... Yes, it definitely should begin with a late fee.  It makes far more sense than the SOL beginning when you last used the card, which could be 55 days before default.  In that case the bank is getting screwed out of two months of opportunity to sue you.    

 

 

Share this post


Link to post
Share on other sites

The line "either party" would refer to a creditor taking an action to suspend or limit the account by either freezing the account or lowering the credit limit. Normally the "last item" would be a charge or payment on the account . However the Courts have held that in a "last item State" the accrual date would start on the date the creditor took any action to freeze or limit the account.

 

( This happens sometimes when a good account has it's credit limit reduced to the amount currently owed because of OTHER credit account defaults)

 

And yes, in most cases a "last item" accrual clause is an advantage to the customer.

Share this post


Link to post
Share on other sites
Posted (edited)

Now, if you bring the account up to date, then the creditor cannot sue you and the SOL is never brought into play.  

 

Not so; you need to read a few credit card agreements. They can close your account at any time for a myriad of reasons, accelerate the balance due, and give you thirty days to pay it. If you don't, they can sue you.

 

As for the SOL, if there is any controversy, the court will look at "the four corners" of the agreement between the parties to determine exactly what triggers default and when.  Non payment is the main one. Technically with any credit card account you are in default when you miss a payment and do not get caught up within the required time stated in the agreement.

 

So, rule of thumb, you miss your payment due June 1. You are in default July 1. They don't usually take any real action until they charge off the account at the six month mark.

 

The "squirrel clause" fits this scenario. The last action taken on an open account in good standing related to a default would have to be the last payment. I doubt it would be a charge; nobody has ever been sued for making a charge on an account. You could make your monthly payment (staying in good standing) then go out and use the card. That's what they want you to do. The trouble only starts when you stop paying. At most, this would only add thirty days anyway, so it is usually not that important.

 

It's like the old "Art Fern" Johnny Carson routine. Bad credit? We don't care. No job? We don't care. Miss a payment? Now we care.

Edited by legaleagle2012
quote

Share this post


Link to post
Share on other sites
6 minutes ago, legaleagle2012 said:

Now, if you bring the account up to date, then the creditor cannot sue you and the SOL is never brought into play.  

 

Not so; you need to read a few credit card agreements. They can close your account at any time for a myriad of reasons, accelerate the balance due, and give you thirty days to pay it. If you don't, they can sue you.

 

...

 

Maybe on your planet.

 

On Earth, if the account is brought up to date, then you don't owe them any money.  If you don't owe them money, there is not a lawsuit.  

 

Yes, accounts can be closed by the creditor for a number or reasons or for virtually no reason.  However, it's a good thing you only pretend to be a lawyer because I just checked my USAA, Chase and Bank of America agreements and the balance due is *only* accelerated if you are in default.  

Share this post


Link to post
Share on other sites

The discussion here was not about whether or not a creditor can close your account or whether or not they can or cannot sue if you are not in default ( they can't because there would be no "cause of action". The original question was about when the accrual date of the SOL starts in S.C.

 

Under current regulations a credit card Co. can NOT cancel your credit card because you have bad credit on OTHER accounts ( they were stopped from doing that about 10 years ago). However, they can and DO reduce your credit limit down to what you owe, or if you have no balance due they can and do reduce your credit limit to $200. even if you are up to date and had a $10,000. credit limit. Plus of course they can refuse to renew your card. 

 

SO-- to summarize- The accrual ( starting date) in MOST States is the first missed payment date. However, in a FEW "last item" States like S.C. ( and Cal.) the accrual date is the last item from EITHER party. This would include the last payment made, the last PURCHASE made, or the date that the creditor reduced your credit limit.

Share this post


Link to post
Share on other sites
50 minutes ago, Why Chat said:

The discussion here was not about whether or not a creditor can close your account or whether or not they can or cannot sue if you are not in default ( they can't because there would be no "cause of action". The original question was about when the accrual date of the SOL starts in S.C.

 

Under current regulations a credit card Co. can NOT cancel your credit card because you have bad credit on OTHER accounts ( they were stopped from doing that about 10 years ago). However, they can and DO reduce your credit limit down to what you owe, or if you have no balance due they can and do reduce your credit limit to $200. even if you are up to date and had a $10,000. credit limit. Plus of course they can refuse to renew your card. 

 

SO-- to summarize- The accrual ( starting date) in MOST States is the first missed payment date. However, in a FEW "last item" States like S.C. ( and Cal.) the accrual date is the last item from EITHER party. This would include the last payment made, the last PURCHASE made, or the date that the creditor reduced your credit limit.

 

Can you point to the regulation that states a creditor cannot close your account because your overall creditworthiness deteriorates?

Share this post


Link to post
Share on other sites

https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1026/13/#d-2
(3) Acceleration of debt and restriction of account prohibited. A creditor shall not accelerate any part of the consumer's indebtedness or restrict or close a consumer's account solely because the consumer has exercised in good faith rights provided by this section. A creditor may be subject to the forfeiture penalty under 15 U.S.C. 1666(e) for failure to comply with any of the requirements of this section.

Share this post


Link to post
Share on other sites
4 minutes ago, Why Chat said:

https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1026/13/#d-2
(3) Acceleration of debt and restriction of account prohibited. A creditor shall not accelerate any part of the consumer's indebtedness or restrict or close a consumer's account solely because the consumer has exercised in good faith rights provided by this section. A creditor may be subject to the forfeiture penalty under 15 U.S.C. 1666(e) for failure to comply with any of the requirements of this section.

 

I'm still confused.

 

You stated "you have bad credit on OTHER accounts".  I took that to mean that if I default on, say, my Chase card, Citi could not get afraid and close my account.  What am I missing?

Share this post


Link to post
Share on other sites
5 hours ago, Why Chat said:

https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1026/13/#d-2
(3) Acceleration of debt and restriction of account prohibited. A creditor shall not accelerate any part of the consumer's indebtedness or restrict or close a consumer's account solely because the consumer has exercised in good faith rights provided by this section. A creditor may be subject to the forfeiture penalty under 15 U.S.C. 1666(e) for failure to comply with any of the requirements of this section.

I'm not following either.  "This section"

§ 1026.13 Billing error resolution.

is about billing error resolution, not what's happening elsewhere on a consumer's credit report.

Share this post


Link to post
Share on other sites

You are correct. I am mistaken. Because of the Credit Card Act of 2009 creditors can no longer raise your interest rate retroactively because of bad credit on OTHER accounts ( which is what my link refers to) however they were required to give notice of cancellation ;In fact, according to the Equal Credit Opportunity Act, creditors can close an account for delinquency, inactivity or default with no notice whatsoever. If they close an account for other reasons, such as an adverse credit report, they must notify the cardholder within 30 days after taking the adverse action. 

In practice creditors have chosen to not cancel cards but instead reduce the credit limit and then non renew.

 

Share this post


Link to post
Share on other sites
3 minutes ago, Why Chat said:

You are correct. I am mistaken. Because of the Credit Card Act of 2009 creditors can no longer raise your interest rate retroactively because of bad credit on OTHER accounts ( which is what my link refers to) however they were required to give notice of cancellation ;In fact, according to the Equal Credit Opportunity Act, creditors can close an account for delinquency, inactivity or default with no notice whatsoever. If they close an account for other reasons, such as an adverse credit report, they must notify the cardholder within 30 days after taking the adverse action. 

In practice creditors have chosen to not cancel cards but instead reduce the credit limit and then non renew.

 

Makes more sense.  Thanks for clarifying.

Share this post


Link to post
Share on other sites
14 hours ago, Bluesie58 said:

I live in South Carolina, and I’m not going to argue.  Show me the case law.  

I do not know if there is "case law" all I know is what is in the S.C. statutes;

Title 15. CIVIL REMEDIES AND PROCEDURES
Chapter 3. Limitation of Civil Actions
... account when there have been reciprocal demands between the parties, the cause of action shall be deemed to have accrued from the time of the last item proved in the account on either side. HISTORY: 1962 Code § 10-149; 1952 Code ...

Share this post


Link to post
Share on other sites
On 3/13/2019 at 8:56 AM, PotO said:

 

Maybe on your planet.

 

On Earth, if the account is brought up to date, then you don't owe them any money.  If you don't owe them money, there is not a lawsuit.  

 

Yes, accounts can be closed by the creditor for a number or reasons or for virtually no reason.  However, it's a good thing you only pretend to be a lawyer because I just checked my USAA, Chase and Bank of America agreements and the balance due is *only* accelerated if you are in default.  

On Earth, if the account is brought up to date, then you don't owe them any money.

 

Really? You can be "up to date" and still have a balance, which means you owe them money. What I said about acceleration and payment in full can have  nothing to do with non-payment. Default has many triggering events. 

 

Try Cap One. "you may also be in default under this agreement  if you violate any of the other terms of this agreement or any of the terms of any other agreement with us or our affiliates.................we may restrict your account from new transactions, or close your account and demand payment of the entire outstanding balance."

 

That little scenario is independent of non-payment. Oh, and BofA has a similar clause: "You will be in default of this Agreement if:  (4) you fail to abide by any other term of this Agreement. (many of them have nothing to do with payment).........If you are in default, then in addition to our other remedies under this Agreement, we can require immediate payment of your total outstanding balance.

 

USAA: "Your Account is in Default if you fail to comply with any of the Terms of this Agreement or the terms of any other agreement with us or our affiliates; If you are in Default, we may, at our option suspend or cancel the Account and/or require you to pay the full amount you owe us at once."

 

Chase: "Your account will be in default if: 1) You do not pay at least the minimum payment when due; 2) You fail to comply with this or other agreements with us or one of our related banks; or 3) We believe you may be unwilling or unable to pay your debts on time; you file for bankruptcy; or you become incapacitated or die. If your account is in default, we may close it without notice and require you to pay your unpaid balance immediately."

Share this post


Link to post
Share on other sites
23 minutes ago, legaleagle2012 said:

On Earth, if the account is brought up to date, then you don't owe them any money.

 

Really? You can be "up to date" and still have a balance, which means you owe them money. What I said about acceleration and payment in full can have  nothing to do with non-payment. Default has many triggering events. 

 

Try Cap One. "you may also be in default under this agreement  if you violate any of the other terms of this agreement or any of the terms of any other agreement with us or our affiliates.................we may restrict your account from new transactions, or close your account and demand payment of the entire outstanding balance."

 

That little scenario is independent of non-payment. Oh, and BofA has a similar clause: "You will be in default of this Agreement if:  (4) you fail to abide by any other term of this Agreement. (many of them have nothing to do with payment).........If you are in default, then in addition to our other remedies under this Agreement, we can require immediate payment of your total outstanding balance.

 

USAA: "Your Account is in Default if you fail to comply with any of the Terms of this Agreement or the terms of any other agreement with us or our affiliates; If you are in Default, we may, at our option suspend or cancel the Account and/or require you to pay the full amount you owe us at once."

 

Chase: "Your account will be in default if: 1) You do not pay at least the minimum payment when due; 2) You fail to comply with this or other agreements with us or one of our related banks; or 3) We believe you may be unwilling or unable to pay your debts on time; you file for bankruptcy; or you become incapacitated or die. If your account is in default, we may close it without notice and require you to pay your unpaid balance immediately."

 

If you had actually finished high school and made it to law school, you might have developed the required reading skills to understand the original poster is inquiring about debt.  "... statute of limitations starts on a credit card debt"

 

You keep pulling extraneous crap out of your butt in your attempts to pretend to be a lawyer.

 

 

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Today's Birthdays

  • Member Statistics

    • Total Members
      176,076
    • Most Online
      1,528

    Newest Member
    iliana
    Joined

About Us

Since 2003, creditboards.com has helped thousands of people repair their credit, force abusive collection agents to follow the law, ensure proper reporting by credit reporting agencies, and provided financial education to help avoid the pitfalls that can lead to negative tradelines.
×

Important Information

Guidelines