Legal Question in Credit and Debt Law in Arizona
When a debt buyer (factoring company) buys a charged off credit card account and now becomes the owner of that bad debt, is that charged off debt still considered a credit card debt or just a debt (considering the debt buyer is not a creditor or lender and hasn't extended any credit to the debtor)taking into account also, when the debt buyer reports the debt to the credit reporting agencies, it's listed as an open account rather than a revolving line of credit or loan?
1 Answer from Attorneys
When a debt is assigned to a collections company or a law office, it does not change the character of the debt. Most often a debt can be a contractual debt or a credit card debt. They each have different statutes of limitations for filing a lawsuit. In Arizona a breach of contract has a 6 year statute determined from the time of the breach... a credit card debt has a 3 year statute from the last payment on the debt. Many times the company that acquires the debt sues on vague theories including "account stated", "open book account" and contractual theories so that they maximize their opportunities to collect on the debt. If you are being contacted by collections companies for unpaid debts, it might be a good idea to meet with an attorney to explore your options in resolving the problem. If you would like to discuss your particular situation, don't hesitate to contact Stephanie Coulter of this office at 602 462 1004 to arrange a time for discussion.
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