Statute of limitations for a credit card

Procedure for debt recovery on a credit card

When issuing a credit card, the bank concludes a credit agreement with the client. The recovery procedure for bank cards is identical to the rules applied to loans. Cases of this category are considered by courts of general jurisdiction. The territorial jurisdiction procedure can be changed by agreement of the parties. In most cases, the case is considered at the place of residence (permanent/temporary registration) of the defendant — the credit card holder.

Credit card debt is similar to loan debt. Delinquency occurs on the day following the day the mandatory monthly payment is due. The payment amount is 3-8% of the total card debt. Debt is collected by the bank in the following sequence:

• Telephone, written, and electronic notifications to the holder about the need to repay the debt.
• Involving an agent (collection agency) for the purpose of debt recovery.
• Applying to court or assigning the debt under an assignment agreement.

Depending on how the client responds to the bank's demands, the case for the same debt may be transferred to a collection agency several times. General rules for the collector's interaction with the debtor do not depend on the type of credit obligations. Also, the creditor may limit itself to the work of its own collection department, after which the troubled client's case is transferred to court.

How the statute of limitations on credit cards is calculated

Considering that cards with a credit limit are serviced on the basis of a credit agreement, the provisions of Article 196 of the Civil Code of the Russian Federation are applied when calculating the statute of limitations. This means that for such circumstances, the general statute of limitations (SL) applies, the duration of which is 3 years.

The cause of numerous disagreements is the start of the SL countdown — that is, from which day the 3 years are calculated. In accordance with Part 2 of Article 200 of the Civil Code, the demand made by the creditor is used as the starting point for obligations whose term is not determined or is determined by the day of demand. In the case of cards and loans, this approach is not used, because repayment terms are always clearly spelled out in agreements.

If credit obligations are fulfilled in parts, then the SL is calculated separately for each part from the moment when the creditor learned or could have learned about the violation of their right. This scheme is applied to loans with a payment schedule: 3 years are counted from the day of delinquency for each monthly payment.

In the case of credit cards, there is no payment schedule, so the SL countdown begins from the moment the bank sends the client a notification with an account statement. The account statement indicates the total amount of debt and the period within which it must be repaid. A reasonable period is considered to be one month (30 calendar days). If the client fails to fulfill the demands within the specified period, the statute of limitations begins to run.

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If the bank does not apply to the court within 3 years

3 years are given to the creditor to exercise the right to judicial debt collection on a loan or bank card. After the expiration of the SL, nothing prohibits the bank from filing a lawsuit against the debtor. In this case, the defendant (debtor) declares the expiration of the terms, and if there is no calculation error, the court will refuse the bank's claim and close the court proceedings.

Consequently, if the bank does not apply to the court within 3 years, it will be able to do so later. But a single application (motion) from the defendant — the card owner — is enough to close the proceedings. That is why it is important to correctly calculate the SL to be sure that the bank can no longer legally collect the debt.

At the same time, the bank can demand debt repayment out of court after the expiration of the statute of limitations. Bad debt is often bought up by collection agencies, which begin interacting with the debtor. Such organizations will not file a lawsuit, but they can make out-of-court demands.

What actions of the debtor may lead to the reset of the statute of limitations

In addition to the law allowing the statute of limitations to be reinstated if there is a valid reason for missing it, certain actions by the debtor that restart the statute of limitations are also described. This position is designed to balance the parties' interests when resolving debt collection situations. The following actions by the debtor restart the three-year period:

Documentary acknowledgment of a claim by the creditor refers specifically to the documentary fact of acknowledging the claims; merely receiving the claim is not enough. If the bank offers the debtor a pre-trial settlement option for the current situation and the debtor accepts this offer, the running of the limitation period is suspended. The period for which the pre-trial debt settlement procedure is suspended can be up to six months (Clause 3, Article 202 of the Civil Code of the Russian Federation). Other actions by the borrower that interrupt the statute of limitations include:

• Applying to the bank for installment payments, a payment deferral, credit holidays, or debt restructuring.
• Signing account reconciliation documents between the borrower and the bank.

This list is not exhaustive. At the same time, it is important that the borrower takes an active position: they must perform certain actions. The debtor's inaction cannot serve as a reason for restarting the statute of limitations.

Collectors demand debt repayment after the expiration of the statute of limitations

In accordance with Article 199 of the Civil Code of the Russian Federation, a person may apply to court to protect their rights at any time, including cases where the statute of limitations has expired. If the defendant (borrower) does not claim that the statute of limitations has expired, the court will accept and consider the claim.

For this reason, people complain that many years later, a collection agency is demanding the repayment of a credit card debt. Collectors are counting on the fact that the person will not want to deal with having a court claim canceled. It is difficult to give a definitive answer as to whether this position is correct. However, out-of-court demands from banks and collectors to repay a debt after 5 years or more do not contradict current legislation.