Credit Card & Application of limitation
Soma
(Querist) 21 December 2009
This query is : Resolved
A credit card defaulter has stopped repayment since last 5 years. Since then, 5yrs, card has been blocked.
Bank now has sent a legal notice.
What reply by the card holder is appropriate which will not effect the application of limitation act?
Whether the card holder should reply at all or not? if yes then in what way? so that if any suit filed subsequently he can claim limitation.
Till date bank filed no money suit or any suit.
What is the exact legal position?
Raj Kumar Makkad
(Expert) 21 December 2009
Limitation for recovery of debt is 3 years from last confirmation and if no any confirmation of debt has been made since last 5 years then bank cannot recover and reply accordingly can be made.
A V Vishal
(Expert) 21 December 2009
Debt collectors do not have an indefinite period of time to continue trying to collect payments from old debts. There is an expiration date, called the Statute of Limitations, that prevents debt collectors and/or the original lender, from pursuing you for the rest of your life on old debts. Before you go ahead and send in a payment on an old debt, check to be sure that the statute of limitations hasn't expired. If the expiration date has passed, you may be protected by law and not liable for that debt.
Use the Statute to your Advantage: The statute of limitations starts for the date of Last activity on the account, as presented on your credit report. This is not always the last date of your payment. If you have communicated with the debt collector beyond the date you made the payment, and they have updated your credit report to show the new date as the date of last activity, the statute of limitations will start from that date.
Sometimes the statute of limitations has expired but debt collectors continue their attempts to collect because they hope the debtors do not know about the statute and that they will pay with enough threats. If you are 100% certain the statute of limitations has expired, you can simply ignore them. If a lawsuit is brought against you, you will have justification in that the time limit has expired for the collection of that debt.
If you enter a payment agreement, talk to the collectors or promise to make a payment; you will restart the statute of limitations to day one!
Kiran Kumar
(Expert) 21 December 2009
very well replied by Vishal Ji.
Soma
(Querist) 21 December 2009
One more question Vishal Sir,
what is the extent of "talk to the collector"?
If the collection agency calls over phone and the debtor says that "I have no money so I can not pay"
whether in such case limitation is waived out?
Soma
(Querist) 21 December 2009
Lastly if the Bank itself keeps on sending onesided monthly credit card statement or keeps on sending demand notice then what is the position of law of limitation?
A V Vishal
(Expert) 22 December 2009
Well, the details have to be looked into Soma, mere sending of statement is insufficient there must be acknowledgement of debt by the card holder too....
Soma
(Querist) 22 December 2009
ATTN: ALL SENIORS!
WHETHER ORAL ACKNOWLEDGE OF DEBT RESTART LIMITATION PERIOD IN INDIA?
IF YES UNDER WHAT SECTION OR JUDGMENT?
