Tag Archives: debt

Arizona Statute of Limitations on Credit Card Debt

Many people have been asking me recently about Credit Card debt and the statute of limitations on it.  This the the amount of time that a bank can used the legal system and sue a customer to collect a debt.  After this time they can only ask but not use the legal system.  It is a complex issue here in Arizona because for many years it has always been Three years but recently things have changed the Arizona State Legislature created a bill, HB2412 to make it 6 years.  It passed on April 11th 2011.  But this bill was so short and so poorly written that it caused a huge amount of lawsuits and problems for the People of Arizona.

This is why…  There is a Federal law that defines all credit cards as “Open Accounts”.

Open-ended Accounts: These are revolving lines of credit with varying balances. The best example is a credit card account. Please note: a credit card is ALWAYS an open account. This is established under the Truth-in-Lending Act:
TITLE 15 > CHAPTER 41 > SUBCHAPTER I > Part A > § 1602
§ 1602. Definitions and rules of construction(i) The term “open end credit plan” means a plan under which the creditor reasonably contemplates repeated transactions, which prescribes the terms of such transactions, and which provides for a finance charge which may be computed from time to time on the outstanding unpaid balance. A credit plan which is an open end credit plan within the meaning of the preceding sentence is an open end credit plan even if credit information is verified from time to time.

And there is STILL on the books this ARS which defines all Open accounts as having a 3 years Statute of Limitations.

ARS 12-543. Oral debt; stated or open account; relief on ground of fraud or mistake; three year limitation

There shall be commenced and prosecuted within three years after the cause of action accrues, and not afterward, the following actions:

1. For debt where the indebtedness is not evidenced by a contract in writing.

2. Upon stated or open accounts other than such mutual and current accounts as concern the trade of merchandise between merchant and merchant, their factors or agents, but no item of a stated or open account shall be barred so long as any item thereof has been incurred within three years immediately prior to the bringing of an action thereon.

3. For relief on the ground of fraud or mistake, which cause of action shall not be deemed to have accrued until the discovery by the aggrieved party of the facts constituting the fraud or mistake.

So if you take both of those together, it would seem that it is still 3 years.  But with the bill passed in April 2011 they only edited ARS 12-548 to read…

ARS 12-548. Contract in writing for debt; six year limitation; choice of law

A. An action for debt shall be commenced and prosecuted within six years after the cause of action accrues, and not afterward, if the indebtedness is evidenced by or founded on either of the following:

1. A contract in writing that is executed in this state.

2. A credit card as defined in section 13-2101, paragraph 3, subdivision (a).

B. If there is a conflict between another jurisdiction and this state relating to the statute of limitations for a debt action as described in subsection A of this section, this section applies.

So the ARS now has conflict within it.  There is also nothing in the bill to “Grandfather” credit card debt that was already out of SOL but now is back within it.  So these questions, as most do, found their way to court and the Judges have decided to lean in the favor of the banks for the most part.  So now people who have old debt are now being made to pay, which will result in more Arizona bankruptcies, and more money leaving our state.  It would have been really nice if the above bill made things crystal clear by REMOVING the part in 12-543 about open accounts, but they did not.

IMHO I think that the limit on Credit card debt should be 3 years because if the bank can’t get their act together in 3 full years people should be free from the worry of the unknown so they can move on a rebuild this economy.

So now people can’t move on, and people are getting aggressive collectors calling them.  And our legal system is filling up with cases that were previously long dead.   This is a great example of a simple rule change that has huge unintended consequences.

As I have been getting into the ARS more and more I have noticed so many conflicts within it where two different things are said in two different ways in two different areas but they both affect the same thing and make it confusing for citizens, and a mess in a legal system.  There is nothing that can be done to these messes with out an act of the Legislature.   It is probably too late in 2012 to do anything about this but there is always 2013.


Freedom in the modern age.

Well I have never talked on here about entertainment before but here is one that is good.  If you do or do not know there was a show called Jericho.  Last night was the last episode of it.  It was a really great, well written show.  It lost some people because for a while it went a bit slow, and most shows with arc don’t last once you miss a episode or too and the network changed it’s time slot at a very critical time in the development of the show.  (Arc is when a show is a story from one episode to the next so you have to watch them in order to understand fully what is going on.)  Basically they did not give it the chance they should have and it failed.   It was canceled after the first season, but the largest fan outcry in TV history made them bring it back.  They did so with little advertising and fanfare, and had a second season of only 7 episodes that mostly concluded the entire story.

The reason this show was special is because it touched on subject that are almost never talked about on TV in this way.  Maybe it made some of the corporate people unhappy with the direction it was going.


Basically the story goes like this.  There are bombs that go off and destroy the 23 largest cities in the US except New York.  Communication and power stop.  Food runs out and people in rural Kansas start fighting to survive.  Well equipped mercenaries raid towns and take all the resources and kill many people.  At some point a goverment is put in place.  The old US has the east, TX is independent and the west forms a new nation.  The nation formed in the west is totally controled and financed by a huge mega corporation, the same one that ran the war in Iraq for the US and hired all the mercanires that the US used worldwide before the attack.  The corporation quickly takes part of everything.  They take away freedom, they surround each town with checkpoints so that only products that say can get in or out.  They rush a new constitution that takes away all the power of the people and gives it to the corporation.  Everything is unfair but they have all the resources and power.  Soon the people start to revolt, and by the end of the show all the viewers are calling for revolution.  The last episode is the start of this revolution with Texas shooting down airplanes from this new western nation.

Much of the show focused on the trap of giving corporations too much control of the government, which in turn takes rights away from the people.  This is something that is happening right now in the United States.  There are so many ways that our freedom has been taken.  The government is fairly corrupt.  They spend way too much, and take way too much.  They also spend so much more than they take in.   Who said the federal goverment should secure travel?  Who said they should put so much control on what we eat?  Who said that the government should run the school system in such a poor way?  We tax people so unevenly but yet the government mails out billions of dollars in checks.  The show Jericho showed how this line of thinking will only result in loss of freedom, and at some point the people will revolt.

If you told anyone 20 years ago the things that are going on in this nation right now they would have said you are crazy, that could never happen.  That is way overstepping the role of government.  I guess they are doing it just slow enough that most people don’t notice.   The education system has failed the public by creating the dumbest population this nation has ever had.

People in our nation now expect to carry ID everywhere, go through government checkpoints to travel.  It took me over a year to have our federal government allow my wife to enter the nation, they have no right to say who I can and can’t marry.  People expect to give a personal ID number every time they talk business on the phone.  People expect their information, privacy, and rights to be disrespected.   Most of them are so miseducated that they simply believe what they are told by the media, they have no idea how to think for themselves.

If it goes much farther down this path I will really start to fear for the future success of my country, the United States of America.  Most of the nation and the decisions are totally out of the control of the people, and most of the people disagree with many of the decisions.  Most people think we are not to be the world police, they think we spend way too much and should not carry debt.  Everyone I know thinks the tax system is crazy and needs to be replaced, but yet every year it gets more complex.  When will the craziness end.   Maybe only with revolution.

The dollar is so weak, and we are paying for it, GREAT!

For years now we have been borrowers.  We spend way more than we make.  I am not just talking about the government but also the people.  You can see this in our balance of trade.  Because of this the dollar is falling like a rock.  People don’t want to lend money because it will probably devalue more than the interest gained.

Imagine that I would lend you $1 million dollars and you need to pay me $1.1 million a year from now, well if the dollar goes down 20% I am only getting paid back (In present dollars) $880,000.  So why on earth would I lend you the money.  This is the problem that we are having now.  Up until recently most of the money being lent to Americans was coming for foreign investment.  These foreign investors as a whole are hesitant to lend us money.

So what is the solution that the government thought up.  Well they offered to lend money, billions of it, to the banks so that they can lend it back out.  But where did the fed get this money to do this, they simply typed it into a computer and created it.  This makes more dollars in existence, and will further sink the dollar down.  This cycle will keep repeating and soon our dollar will be worth very little.

What will this do for us.  Well it will make the dollar cost of most things go up.  Even real estate will soon start to go up with all of this.  Gold is now over 1000, silver is over $20 and oil is at record highs over $110.  This has been coming for YEARS now, I have been talking about it for about 3 years.  This just that start, until we start exporting much more than we import, and we stop spending so much this will keep happening.

So what is the best position to be in?  Well you want to have as little dollars as you can, you even would want to be short on dollars.  This means to borrow them.  I have debt for my house, and for other things, and when I saw this coming I took out as much as I could and invested it in things overseas, and in physical things such as real estate, and I think that in a few months, the value of these assets will be much larger than the debt.  The banks have figured this out and stopped lending to most people.

So what will happen to people who were not ready?  Well it will not be good.  If you have a job, and save money and have no debt you are in the worst position. The money you have saved will be worth less than it should be.  The

What can you do not?  Well as I said before the people who see it first are the ones that are in the best shape, they can prepare for the change.  Now it is too late, there is very little that can be done.  Right now I think it would be good to move money overseas, invest in companies with a large amount of foreign exposure.  Pay off only the minimum on debt.  Don’t keep cash, go turn it into silver.  But MOST important, if you can afford it GO BUY REAL ESTATE.  The prices will never be this low again, you can still usually borrow money to buy real estate and pay back later with money that is worth less.  Prices will go UP much faster than your pay will go up, so be ready for that.  Food cost will go up, and fuel costs will go way up.  Your pay will probably stay flat.  Consider a side business if you need more money.

What should the government do?  Well they were the ones that created this, they were lending money out so cheaply, and printing money like crazy to keep us afloat.  You got to remember that the government is over 9 trillion in DEBT.  They also have over 30 TRILLION in obligations to people in the form of social security and government retirements.  This is a huge debt.  So what they did is they tied this to CPI, the fake, government created index of inflation.  Today it was released and it was 0%.  The people on CNBC just laughed at how fake it is.  But because it is 0% that means that the social security debt does not go up this month.  Now, by any measure dollar is worth MUCH less now than 5 years ago, I would say it is worth half as much or so.  So basically the government just CUT their debt in half because of the weak dollar, and this is very smart.  But they can’t let people know this is going on, they have to spin this so that foreign investors and the general population don’t know what is going on.  For all the people who are not watching are going to be hurt, but for the government, the big investors and all the people who see the signs and act on it, this will be a great time of huge wealth creation.

Jason Dragon