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Consumers need to be aware of their rights

During the recent recession, many District of Columbia residents had difficulty paying their credit card debt. This has led to some aggressive methods of debt recovery, so it is important for consumers to be aware of the statute of limitations on their debt and understand their rights under the federal Fair Debt Collection Practices Act.

The statute of limitations for receiving a court order to collect a debt is three years from the date of the last payment in Washington, D.C. However, consumers should understand that this doesn't preclude debt collectors from attempting to collect the debt using other methods such as mail and phone calls as long as they follow the rules outlined by federal law, which include not harassing or threatening the consumer. Consumers also need to be aware that even the smallest payment can reset the clock on the statute of limitations.

It's also important for consumers to be aware that the majority of major card issuers name the state whose laws govern their agreements. For example, Citibank uses South Dakota law which allows a debt to be collectible by court order for six years, which is a longer period that is contained in the statute of limitations in many other states.

It is vital for consumers to understand their rights when it comes to debt collection. There are cases where the time for a creditor to legitimately demand a judgment has passed, so a consumer should be proactive and attend the court hearings. If a consumer successfully proves that the debt is no longer collectible, the court will, in most cases, not issue a judgment in favor of the creditor.

Source: Creditcards.com, "State statutes of limitation for credit card debt", Connie Prater and Fred O. Williams, November 15, 2014

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