Definition

• "Statute of limitations" refers to the time period allowed for legal action applicable to a specific civil or criminal matter. In Maryland, credit card debt is a civil matter with statutes pertaining to open contracts. Each state sets a specific time period during which original creditors, collection agencies or debt buyers may initiate a lawsuit against the credit card account holder in an attempt to collect the debt.
  
  

Time Period

• In Maryland, the statute of limitations for open contracts (credit cards) is three years. The three-year window begins on the date of the last payment posted to the credit card account. For example, if you live in Maryland and the last payment posted to your credit card account was June, 2010, the creditor has until June, 2013, to initiate a lawsuit, assuming that there is no additional activity on the account, such as another payment. Making another payment on the account will restart the statute of limitations for an additional three years.
  
  

Collection Activity

• The statute of limitations in Maryland and other states does not invalidate the outstanding balance on a credit card account. The statute of limitations strictly relates to the ability of the creditors to legally initiate a lawsuit against the credit card account holder. Original creditors, debt collectors and debt buyers still have the rights to contact the credit card account holder regarding the debt as long as the contact falls in line with the Federal Debt Collection Practices Act.
  
  

Credit Reporting

• Even if the statute of limitations is up on the credit card account, original creditors and third-party collection companies may continue to report the delinquency to all three credit reporting agencies for up to seven years. These negative entries may be from one or all types of creditors, resulting in several delinquent listings on your credit report for one credit card account. If the creditor, debt collector or debt buyer wins a judgment against the credit card account holder, Maryland state law allows that the judgment be valid and remain on your credit report for 12 years, with a maximum interest rate of 10 percent added to the account balance.