Borrowed Time: Applying Statute of Limitations in Consumer Debt Cases

In recent years, New York courts have been deciding increasing numbers of consumer debt collection cases. Consumer debt filings in New York City Civil Court have nearly tripled since 2000,¹ climbing to nearly 300,000 in 2008.² The vast majority of debtor-defendants are pro se,³ and many consumer debt collection cases present statute of limitations issues.

Applying the statute of limitations in consumer debt cases should be straightforward; however, consumer law advocates find that some New York courts are unfamiliar with governing law. Generally speaking, the statute of limitations for actions on contracts, including credit card agreements, is six years in New York.⁴ Almost all credit card agreements, however, contain choice-of-law provisions designating the laws of various other states, with varying statute of limitation periods. The situation is further complicated by the fact that New York is among the states with a “borrowing statute.”⁵ Under New York’s borrowing statute, a shorter statute of limitations from another state may apply in certain situations.

Credit Card Cases