Let’s set the scenario:
You didn’t pay on a credit card, and the creditor finally charged off your account. The card was issued and charged off when you lived in Texas, but now you live in Rhode Island.
To understand the statute of limitations, you have to understand the type of account you have. Different types of accounts are viewed differently by the law.
A credit card agreement is known as a ‘Open-Ended’ agreement. Open ended agreements have a specific statute of limitations, and that may be different than other types of accounts. See my post on ‘What are the different types of credit accounts’.
In Texas, where you got your credit card and defaulted on it, the statute of limitations for open-ended accounts is 4 years. In Rhode Island, the statute of limitations for open-ended contracts is 10 years. Unfortunately, you now live in a state where the statute of limitations is longer than where you originally lived.
Debt collectors typically follow the statute of limitations of the state you currently live in. So, the collector can now collect against the law in Rhode Island, instead of the limit on Texas. This means they have an additional 6 years in which to sue you.
Even if the statute of limitations has expired before you move, the collection firms will still collect against the statute of limitations in the state you currently live in. Because of this, a debt you thought you could not be sued for may crop back up in court if you move.