Fighting credit bureaus, creditors and debt buyers

Overdraft credit lines are NOT credit cards and the 3 year SOL applies in Arizona

A reader asked about the statute of limitations for an overdraft credit line tied to a checking account.

From my Midland Funding cross-motion for summary judgment in Arizona justice court regarding a CREDIT CARD, posted at the Litigation Forum:

  1. Midland‘s Claim Is Time Barred.

The Arizona legislature changed the statute of limitations for credit cards from 3 to 6 years in 2011. The new law became effective on 7/20/11. [DSOF 4] Therefore, the 3-year statute of limitations applies to the alleged debt as it was not subject to a written agreement [DSOF 5] and all my credit card accounts were “open” accounts:

ARS 12-543 Oral debt; stated or open account; relief on ground of fraud or mistake; three year limitation
There shall be commenced and prosecuted within three years after the cause of action accrues, and not afterward, the following actions:

  1. For debt where the indebtedness is not evidenced by a contract in writing.
  2. Upon stated or open accounts other than such mutual and current accounts as concern the trade of merchandise between merchant and merchant, their factors or agents, but no item of a stated or open account shall be barred so long as any item thereof has been incurred within three years immediately prior to the bringing of an action thereon. [emphasis added]

I have not used any credit card that I later defaulted on after June 2008 [Affidavit ¶2, DSOF 6]. Midland filed the complaint on June 11, 2012. [DSOF 7]

Pursuant to ARS 12-505, an action barred by pre-existing law is not revived by amendment of the law:

ARS 12-505. Effect of statute changing limitation

  1. An action barred by pre-existing law is not revived by amendment of such law enlarging the time in which such action may be commenced.

This action is time barred:

  • Midland failed to produce a written contract and it can not produce a written agreement as I did not have written contracts with any of my credit card issuers. [Affidavit ¶3, DSOF 5]
  • Midland can not possible document charges less than 3 years prior to 7/20/11, the effective date of the new 6 year statute of limitations [Affidavit ¶2, DSOF 6]
  • Time barred actions are not revived by amendment of the law.
  • Midland filed suit on 6/11/12, when the action was already time barred.

Attached hereto is DSS Financial v. Deborah Walrod as Exhibit A.   On 1/15/09 The Maricopa County Superior Court concluded on appeal that the action for a First USA credit card was time barred as the last charge occurred over 3 years prior to the filing of the lawsuit.

In LVNV Funding v Leslie Thompson, Exhibit B, the Maricopa County Superior Court ruled on 2/15/08 that a claim for a Sears charge card was time barred because the last charge occurred over 3 years prior to the filing of the lawsuit.

Even if Midland could provide admissible evidence to document its claim, this action would be time barred.

The court dismissed Midland’s claim because the SOL had expired.

In the reader’s case, I would argue that the 3-year statute of limitations for open accounts applies, provided that the debt buyer failed to provide a written contract. A credit line is not a credit card as defined by ARS A.R.S. § 13-2101,

12-543. Oral debt; stated or open account; relief on ground of fraud or mistake; three year limitation

Hope that helps!

PS: I would also always challenge the authenticity of debt buyer documentation such as bills of sale, account docs, etc. as I prevailed against debt buyer Acarta because they could not establish standing (the AZ court of appeals remanded after superior court had granted the Acarta motion for summary judgment.)

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