Statute of Limitations for Collection of Credit Card Debt in Oregon

A recent Oregon Court of Appeals decision has affirmed that the applicable statute of limitations for collection of credit card debt within the state is 6 years.

Multiple Oregon consumers challenged the application of Oregon’s statute of limitations to their debt collection cases based on the credit card user agreement, which specified that Delaware law, with it’s 3 year statute of limitations would apply to disputes concerning the card.

Delaware’s statute of limitations period however, is subject to a tolling provision which means it does not run when the Defendant is out of state. In other words, if a Defendant opened a credit card which was governed by Delaware law while residing in the State of Oregon, the Delaware statute of limitations would be indefinitely tolled or postponed because the Defendant does not reside in Delaware.

In the recent case, the Defendant/consumers argued that because, pursuant to the Fair Debt Collections Practices Act, debt collectors must file a lawsuit in the state where a consumer entered into the contract or where the consumer resides, Oregon courts should apply Delaware’s three year statute of limitations. To hold otherwise, they argued, would lead to an absurd result that could not have been intended by the Delaware legislature: that the statute of limitations will never run so long as the consumer resides outside of the state.

The Oregon Court of Appeals rejected the consumers’ argument. Instead, it held that Oregon statute 12.450 applies in this situation. This provision allows the court to apply Oregon’s statute of limitations when another state’s is substantially different, and does not afford a fair opportunity for a plaintiff to sue, or causes an undue burden to for a defendant to defend against the lawsuit.

The Court held that to apply Delaware’s statute of limitations would create an unfair burden on the defendant because there would be no statute of limitations. As such, Oregon’s 6 year statute of limitations applies. Creditors therefore have 6 years from the last charge, or last voluntary payment to file a lawsuit to collect delinquent credit card debt in the state.

If you find yourself unable to meet your monthly obligations, including credit cards bills, don’t wait until you are sued to seek help. We invite you to contact us to schedule a free consultation to discuss debt work-out and bankruptcy options.

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