College Credit Cards Mistakes, the Statute of Limitations and Bankruptcy - Westgate Law

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College Credit Cards Mistakes, the Statute of Limitations and Bankruptcy

Going to college is (in most cases) an excellent decision. It’s a good choice, a worthy goal, a nice move, a lovely aspiration, etc. But for some reason, once the decision is made many of us lose all logic. We suddenly BECOME college students. And college students, seemingly by definition, make mistakes.

They think photos taken in Mazatlan are somehow going to stay there, they sleep all day expecting to be top of their class first thing in the morning anyway, they wait to study for finals the day before the exam and still hope for a passing grade, they spend more time on social media sites than they do on their college classes, and…they get college credit cards.

There are exceptions to every rule. You may have been an exemplary college student with no Spring Break tales to hide from your progeny in later years. You may have taken the minimum in student loans and avoided using your college credit cards unless you had the cash to pay it off at the end of the month. If so, you are every parent’s fairy tale. Congratulations. But you are the exception, not the rule. For most of us, college was the home to many mistakes. The most lasting of which is often financial.

If you spent your college years spending on credit cards that you couldn’t pay, you aren’t alone. It happens to college students (and non-college students) everywhere. In later years, you might find yourself wishing you could do something about it. Since time machines are not yet accessible (unless you spent your college years developing one and have kept it secret from the rest of us) you’ll have just a couple options to consider.

Bankruptcy is sometimes the best option. By filing for Chapter 7 bankruptcy, you can receive a discharge of your debts. This will remove your liability to pay on the debt and allow you a fresh start financially.

Your other option is to refresh yourself on the statute of limitations in your state and consider how it would apply to your credit card balances. If it’s been long enough for the statute of limitations to pass in your state, then the bad marks on your credit report are probably gone and you can’t be sued for the debts anymore. If this is the situation, you need to consider if it’s worth the expense (and potential setback to rebuilding your credit) that comes with filing for bankruptcy.

If you find yourself in this situation, do what’s best for your financial future. See the past for what it was: carelessness and irresponsibility. Then move on. You aren’t that person anymore. The time for resolution through repayment has passed. Since the statute of limitations has run, making a payment will only restart the statute period. So the only payment that would benefit you would be a payment covering the balance in full or a settlement on the account. Anything else would leave you with a “refreshed” statute of limitations and a liability to pay the remaining balance. Attempting to pay the old debts would actually harm your credit more than not paying them at all at this point. Making a payment would reestablish the account; which would have a negative result on your credit.

While bankruptcy is sometimes the best option, it is NOT the best option if the statute of limitations has run out on your debts. If you have debts in your past that are past the statute of limitations and you want to take care of this issue, your first step is to let it go. Once you’ve done that, focus on rebuilding your credit through a positive credit history you can start today.

For more advice on the benefits of bankruptcy and when it’s an appropriate solution to financial dilemma, contact the southern California bankruptcy attorneys at Westgate Law.

About the Author

Justin Harelik

Justin has a singular goal: to get people out of financial distress and move them to financial stability and prosperity. He does this by combining 15 years of in-depth experience in bankruptcy, credit management, debt negotiation and student loan modifications, and he does it with both English and Spanish-speaking clients.

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