Credit card debt law can refer to a number of laws that may affect the way credit card debt is appropriately handled. These laws may exist on a countrywide level or they may govern smaller regions like territories and states. Federal or countrywide laws usually take precedence over any laws that are enacted regionally. Due to the significant variance in laws, not all of them say the same thing, and it’s especially important to understand differences in state or regional laws.
There are many different topics that credit card debt law may cover. Some laws concern bankruptcy and determine how often people can file for bankruptcy, how long a bankruptcy will stay on a credit report and whether certain types of bankruptcy might require paying off some credit card debt instead of having it excused. Since credit card debt is frequently unsecured debt, any bankruptcy filed that doesn’t require a repayment plan will usually excuse all credit card debt. There might be different rules if a credit card is part of secure debt.
Another important issue in credit card debt law is how unpaid debt is treated when credit card companies or collection agencies attempt to collect it. There are many rules that may govern this process, even specifying the times of day debt collectors may call or whether debt collectors can continue to call if a debtor request that they do not. Equally important in credit card debt law is the statute of limitations on collections. Most states and regions set a specific time period, usually about three to ten years, upon which debt can be collected. Provided the debtor makes no payments during this time, the collector loses the right to sue for the debt once this period expires.
Laws on statute of limitations can occasionally be ignored if a debtor does certain things like paying part of the debt. With some credit card debt law this causes a “clock resetting” feature, where the collector then has the full length of time back to collect a debt. In a state where statute of limitations was seven years, if a debtor decided to pay part of the debt after six years of nonpayment, collectors would get another seven years to collect or to sue, for a total of 13 years.
Other credit card debt law may govern the way in which interest rates may be raised or lowered on unpaid balances. In places like the US, there are a now a number of federal laws that call for greater transparency and disclosure about interest rates, and more time for people to pay bills each month without receiving fines. Not all countries have laws governing things like maximum interest rates or fines that can be assessed if payments are skipped or late. On the other hand, most countries do have, in addition to statute of limitation laws, guidelines for how long credit card debt can be reported on credit reports.