You should understand how credit card debt laws protects your rights as a consumer prior to entering any debt negotiations. Many debtors are surprised to know there are laws in place to look out for their best interest. If you are facing excessive credit card debt, inform yourself of your legal rights. Your ability to advocate on your own behalf relies on an understanding of the laws that protect you.

State Laws

Individual states set specific debt laws for a number of factors. For example, the statute of limitation on credit card debt will vary by state. The statute of limitations tells you and your lender how long they have to file a lawsuit to attempt to recover payment from you. In most states, the period is three to ten years. In some states, though, it can be longer. There may be court cases that set precedents in your particular state regarding the statute of limitations for you to review. All state laws governing your line of credit should be available upon request with your lender.

Federal Fair Debt Collection Practices Act

One federal law protecting citizens from unfair lending practices is the Federal Fair Debt Collection Practices Act. This Act governs how creditors may contact debtors to attempt to collect on unpaid bills. It also provides legislation regarding when and where lawsuits can be established if the creditor and debtor are not located in the same state of jurisdiction.

Credit Card Reform Act

This act includes provisions regarding raising interest rates on existing lines, contacting customers who are under the age of 21 and an extended notice period if interest rates are changing.

Bankruptcy Proceedings

Bankruptcy is a scary word for most consumers looking for credit card debt protection laws. Bankruptcy is truly a legal way to protect a debtor from financial obligations he or she can truly not meet. While a bankruptcy can negatively affect your future net-worth, it can also be the best option for people who qualify. Most debtors will want to explore debt settlement and negotiation proceedings prior to declaring bankruptcy. Settling the debt in court, though, can give you back your financial freedom and a clean slate from debt. 

Where to Go for More Information

Before signing any credit card agreement, understand which laws govern that particular agreement. You can contact creditors on your existing credit lines for further legislation questions. Creditors should, at the least, provide you with a list of relevant legislation for you to further explore. Lawyers, accountants and debt negotiation companies are also advocates for consumer rights. Ask a trusted adviser to help you understand what your rights are as a borrower.