Statute of Limitations (SoL)

antipode12 · Aug 22, 2014

I thought the SoL in NYS was 6 years for Credit Card (open-ended) debt.

BUT, I read a site (I am disallowed by this site to post links!! It's from the creditcards.com site.) and it seems to say that MY state is irrelevant -- that it is the state of the Credit Card Bank that matters.

For example, it states that Chase abides by Delaware statutes -- with an SoL of 3 years.

Any insights?

antipode12 · Aug 22, 2014

Also, I believe that the debts have been sold to Collections Agencies, so the the original CC Bank doesn't own the debt any longer.

So does that mean that the Collection Agencies' home states are the where the SoL will originate from?

jam237 · Aug 23, 2014

No.

Here is the quick version.

SoL of YOUR state is primary.

Now, a lot of companies slip a line into their contracts, preferring the laws of XX to be used when interpreting the contract.

Under the FDCPA suits need to be in YOUR jurisdiction, they can argue to apply the laws of XX in YOUR local court, but they may not always succeed.

antipode12 · Aug 24, 2014

This is from the link where I read about it first:

"According to Section 811 of the law, debt collectors may file suit in the jurisdiction where the "consumer signed the contract" or where the consumer lives.

Some credit card agreements may stipulate that the laws governing the home state of the issuer, not the consumer, determine the terms and major provisions of the contract. That means that if the credit card holder lives in Maine, but the issuer is based in Delaware, the Delaware statute of limitations may apply."
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So you can see why I'm confused.

And this is from the Chase Agreement:

GOVERNING LAW
THE TERMS AND ENFORCEMENT OF THIS AGREEMENT AND YOUR ACCOUNT SHALL
BE GOVERNED AND INTERPRETED IN ACCORDANCE WITH FEDERAL LAW AND, TO THE
EXTENT STATE LAW APPLIES, THE LAW OF DELAWARE, WITHOUT REGARD TO
CONFLICT-OF-LAW PRINCIPLES. THE LAW OF DELAWARE, WHERE WE AND YOUR
ACCOUNT ARE LOCATED, WILL APPLY NO MATTER WHERE YOU LIVE OR USE THE
ACCOUNT.
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Not really sure what that means.

antipode12 · Aug 24, 2014

And I found this interpretation from a Debt Lawyer on Avvo.com:

David Kennedy Bifulco
David Bifulco PRO
Debt Collection Attorney - Trevose, PA
Contributor Level 8

Answered 2 years ago. The rule in your case comes from a case where an individual incurred a debt in Connecticut which has a 3 year statute of limitations for open ended accounts and then he moved to New York which has a 6 year statute of limitations for their residents. In this case the Federal Court decided that where there is a difference between Statutes of Limitations between the State where the Debtor originally signed the contract and the State that they now reside, the Court must use the Statute of Limitations that is shortest between A) The original contract State, B) The State in which the Defendant currently resides or C) The State in which the Creditor is incorporated. This is not very good for Creditors because most banks are incorporated in Delaware which has a 3 year Statute of Limitations.
In your case, just as in the Federal case I just explained, the Statute of Limitations for you is 3 years.
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antipode12 · Aug 24, 2014

I'm totally not being a pest... I am learning as I go -- I just found two further resources that suggest the NYS Statute of Limitations is less than 6 years.

From NEDAP (Again, I would've posted the link, but I am disallowed on this site because I am still new here. Sorry for pasting.)

Update!

In April 2010, New York’s highest court, the Court of Appeals, confirmed that the statute of limitations that applies to a credit card debt may be shorter than six years, depending on where the credit card issuer is based. (See here for the Court’s decision, from Portfolio Recovery Associates v. King.)

Here’s how it works: New York has a law stating that the statute of limitations on a credit card debt is six years. But New York law also states that a creditor cannot take advantage of NY’s six-year statute of limitations if the creditor’s home state has a shorter statute of limitations. (This is what New York’s highest court recently confirmed.) Some of the biggest creditors – such as Chase, Bank of America, and Discover – have home states with three-year statutes of limitations. If you are sued on a Chase, Bank of America, or Discover credit card debt, a three-year statute of limitations will generally apply.

Example #1: Let’s say you had a Big Bank credit card. The last time you made a payment was in January 2007. You therefore “defaulted” in February 2007 (you usually “default” on a credit card debt about 30 days after your last payment). The statute of limitations starts running from your default, in February 2007. Big Bank sues you in a New York court in August 2010. Big Bank is based in Delaware, which has a three-year statute of limitations for credit card debts. Question: Has Big Bank waited too long to sue you?

Answer: YES. Since Big Bank is based in Delaware, which has a three-year statute of limitations for credit card debts, New York law says that Delaware’s three-year statute of limitations must apply. Big Bank cannot take advantage of New York’s longer six-year statute of limitations just because it sued you in New York. Because Big Bank waited more than three years to sue you on the credit card debt, the statute of limitations has expired, and the court must dismiss the case.

This same rule applies even if you are sued by a debt buyer on a credit card debt and not by the original creditor.

Example #2: The same facts as in Example #1, except now, instead of Big Bank suing you, a debt buyer called XYZ Funding has sued you on your Big Bank credit card. Question: Has XYZ Funding waited too long to sue you?

Answer: YES. You still look at where the original creditor is based – the debt buyer does not get any more time to sue you than the original creditor would have had. In Example #2, the statute of limitations that applies is still Delaware’s three-year statute of limitations, since Big Bank is based in Delaware. (It doesn’t matter where XYZ Funding is based.) Since XYZ Funding waited more than three years to sue on the Big Bank credit card debt, the statute of limitations has expired, and the court must dismiss the case.
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And... if you are interested in the case law referred to (which I cannot, admittedly, decipher):

We conclude, however, that the Appellate Division should have applied CPLR 202 to Portfolio's claims to determine whether they were timely brought (see e.g. Global Fin. Corp. v Triarc Corp., 93 NY2d 525, 528 [1999] ["there is a significant difference between a choice-of-law question, which is a matter of common law, and (a) Statute of Limitations issue, which is governed by the particular terms of the CPLR"]).

CPLR 202 provides, in relevant part, that "[a]n action based upon a cause of action accruing without the state cannot be commenced after the expiration of the time limited by the laws of either the state or the place without the state where the cause of action accrued." Therefore, "[w]hen a nonresident sues on a cause of action accruing outside New York, CPLR 202 requires the cause of action to be timely under the limitation periods of both New York and the jurisdiction where the cause of action accrued" (Triarc, 93 NY2d at 528). If the claimed injury is an economic one, the cause of action typically accrues "where the plaintiff resides and sustains the economic impact of the loss" (id. at 529).

Portfolio, as the assignee of Discover, is not entitled to stand in a better position than that of its assignor. We must therefore first ascertain where the cause of action accrued in favor of Discover. Here, it is evident that the contract causes of action accrued in Delaware, the place where Discover sustained the economic injury in 1999 when King allegedly breached the contract. Discover is incorporated in Delaware and is not a New York resident. Therefore, the borrowing statute applies and the Delaware three-year statute of limitations governs.

That does not end the inquiry, however, because in determining whether Portfolio's action would be barred in Delaware, this Court must "borrow" Delaware's tolling statute to determine whether under Delaware law Portfolio would have had the benefit of additional time to bring the action (see GML, Inc. v Cinque & Cinque, P.C., 9 NY3d 949, 951 [2007]). Delaware's tolling statute—Delaware Code Â§ 8117—provides that:

"If at the time when a cause of action accrues against any person, such person is out of the State, the action may be commenced, within the time limited therefor in this chapter, after such person comes into the State in such manner that by reasonable diligence, such person may be served with process. If, after a cause of action shall have accrued against any person, such person departs from and resides or remains out of the State, the time of such person's absence until such person shall have returned into the State in the manner provided in this section, shall not be taken as any part of the time limited for the commencement of the action."

Section 8117 was meant to apply only in a circumstance where the defendant had a prior connection to Delaware, meaning that the tolling provision envisioned that there would be some point where the defendant would return to the state or where the plaintiff could effect service on the defendant to obtain jurisdiction (see Williams v Congregation Yetev Lev, 2004 WL 2924490 *7 [SDNY 2004]). Indeed, Delaware's highest court has held that the literal application of its tolling provision "would result in the abolition of the defense of statutes of limitation in actions involving non-residents" (Hurwich v Adams, 155 A2d 591 [Del. 1959]).

There is no indication that King ever resided in Delaware, nor is there any indication from the case law that Delaware intended for its tolling provision to apply to a nonresident like King. Therefore, we conclude that Delaware's tolling provision does not extend the three-year statute of limitations. Moreover, contrary to Portfolio's contention, it is of no moment that Portfolio was unable to obtain personal jurisdiction over King in Delaware; this Court has held that it is not inconsistent to apply CPLR 202 in such a situation (see Insurance Co. of N. Am. v ABB Power Generation, 91 NY2d 180, 187-188 [1997]).

Applying Delaware's three-year statute of limitation, the instant action should have been commenced not later than 2002. Because the contract claims were not brought until 2005, they are time-barred in Delaware, where the causes of action accrued, and therefore they are likewise time-barred in New York upon application of the borrowing statute. This holding is consistent with one of the key policies underlying CPLR 202, namely, to prevent forum shopping by nonresidents attempting to take advantage of a more favorable statute of limitations in this State (see Antone v General Motors Corp., 64 NY2d 20, 27-28 [1984]).
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jam237 · Aug 25, 2014

The key is the shortest SOL. So you want to know all the SOLs that could apply, so you can argue the one that works best for you.

antipode12 · Aug 25, 2014

OK, so in this case, my state (NY) is 6 years. Chase's is 3 years (in Delaware).

So I can just choose which to apply?

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