I am not licensed in Colorado so I cannot advise you on Colorado law about the statute of limitations. I handle resolution of debts in states where I am licensed so I can speak generally to these issues. Also, credit reports are a matter of federal law and that is the same everywhere. You ask several questions.
First, if you are thinking of filing an answer, there are set time periods in which to do it. You can raise any and all defenses and objections that you have to the complaint. If you have any claims against whoever is suing, you can also raise those. Depending on the circumstances, you should raise these at one time - otherwise you cannot bring them up later.
If the statute of limitations will not expire until 2013, then the lawsuit is timely. The statute of limitations has nothing to do with the debt and how long it can remain on your credit though. If this goes to judgment, it can stay on your credit report 7 years from the date of entry of the judgment. A debt can stay on your credit report 7 years from the date of charge-off (or about 6 months after the debt became delinquent). Even if you settle, the debt is not coming off your report. That would be fraud and ethical creditors will not remove information absent unusual circumstances.
However, what affects you is unpaid debts or judgments, not resolved ones. If you settled now, there is no judgment. Also, once the debt is paid, your credit report will be updated to reflect that the debt has been settled for less than the full amount owed.
What kind of a settlement are you trying to achieve? If you want to make payments, then usually, these have to be at least $100 a month and this is made on the full balance. The creditor will want you to sign a confession of judgment order or agreement (they might call it a stipulation of settlement or something else). If you agree to a term settlement, they will still want this. Usually in the states where I practice, the creditors will only agree to dismiss the lawsuit if settlement is paid in a lump sum or possibly over a term of 6 months or less.
What you need to do is see a lawyer specializing in credit card defense. If you cannot find one, try a colleague of mine - Melissa Culotta; she is in the Denver area.
314 Federal Blvd, Denver, Colorado
At least you should pay a lawyer to review the complaint for you. Some lawyers provide limited legal services and will draft an answer for you for a fee. If you don't have valid defenses, the answer will buy some time but you need to think about resolving the debt. Once judgment is entered, a creditor can try to collect on it by seizing assets that are owned free and clear, freezing your bank account or garnishing wages, if permitted. You should also talk to the lawyer to confirm expiration of the statute of limitations and should discuss protection of your assets in the event judgment is entered. Get an estimated timeline and see if you will have the funds needed by that date to settle.
If you're being sued now, the statute of limitations has been satisfied by the creditor. Stretching out the litigation beyond 12/2013 will not cause the case to exceed the SOL. You can raise as many legitimate defenses that you have. To determine what defenses you have under CO law you should consult with a local attorney.
William Fife is an Attorney with Fife & Cesta, a compassionate firm conveniently located off the US 60 in Mesa, Arizona. The answers given here are based on the information in the question; for a complete answer you should have a consultation with an attorney you trust. Call now for a free bankruptcy consultation. We carefully evaluate your situation and give you real advice.
You can claim as many defenses as you feel are appropriate. If you reach a settlement with them, one of the conditions that you should insist on is that they show that the debt has been satisfied with the credit agencies.
The information provided in this answer does not create an attorney-client relationship. If you are interested in his legal services, feel free to call Chris at (303) 409-7635 at his law office in the Denver Tech Center. All initial consultations are free of charge.