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Credit Card Collections Statute of Limitations: Navigating Legal Boundaries

Is your business struggling to collect unpaid credit card debt? Understanding the credit card collections statute of limitations is crucial. Dealing with unsuccessful attempts to recover this debt can be incredibly time-consuming, costly, and frustrating. When the clock is ticking, how long do you have until it’s too late to collect? 

Let’s take a closer look at the legal boundaries surrounding credit card collections and explore what you can and cannot do to collect payments.

What Is the Statute of Limitations for Credit Card Collections?

The statute of limitations for credit card collections refers to the maximum period your business can initiate legal action to recover unpaid debts. This time frame varies by state. And, it typically begins from the date of the last activity on the account. Once the statute of limitations expires, the creditor loses the legal right to sue the debtor for the debt.

Moving Forward to Collect Unpaid Credit Card Debt

When faced with unpaid credit card debt, your business can take several steps to recover what a customer or client owes you:

  • Communication and Documentation: Open communication with the debtor is essential. Clearly communicate the outstanding debt and document all communication for legal purposes.
  • Negotiation and Settlement: Explore the possibility of negotiating a settlement with the debtor. This could involve accepting a reduced lump-sum payment or establishing a manageable payment plan.
  • Payment Plans: Providing flexible payment plans can be a proactive approach to working with debtors who may be facing financial challenges.
  • Legal Action Before the Statute Expires: If the debtor shows no willingness to cooperate, initiating legal action before the statute of limitations expires may be necessary.

What Happens When the Statute of Limitations Expires?

Once the statute of limitations expires, your business loses the right to sue for the unpaid debt. However, it’s essential to note that while legal action may no longer be an option, your business can still attempt to collect the debt through non-legal means, such as continued communication or reporting the debt to credit bureaus.

Count on IOU.Law to Help Your Business Collect Unpaid Credit Card Debt

Navigating the legalities of credit card collections requires expertise, and a debt collection attorney can be an asset for your business. Atlanta-based debt collection law firm IOU.Law has been successfully collecting business debts for over three decades. We have a refined system for collecting the most money you can recover as quickly as possible. 

Does your business need help recovering credit card debt? Do you want to navigate the credit card collections statute of limitations effectively? Reach out to our knowledgeable legal team today. Schedule a free debt collection consultation with IOU.Law to secure the legal guidance you need.