For most debts, the deadline is 6 years since you last wrote them or made a payment. Under the Fair Credit Reporting Act, debts can generally appear on your credit report for seven years and in some cases longer. The most important thing to remember is to avoid having the debt yours if a collection agency calls you about an old debt. The most important thing to remember is to avoid having the debt yours if a collection agency calls you about an old debt.
The “statute of limitations” for credit card debt is a law that limits the time during which lenders and collection agencies must sue consumers for non-payment.
How long does it take for a debt to become irrecoverable?
If you think that a court ordered you to pay a debt more than 12 years ago and the creditor is asking the court to seize your salary, you may be able to increase the 12-year limit to defend that garnishment. In most states, the collector can still ask you to pay the debt if the debt is yours, the amount is correct and the collection agency is authorized to collect it. You may want to contact a lawyer to find out how this period is calculated and when the period may have started with regard to your debts.
What happens to an unpaid debt after 7 years?
If the company that owns your debts now is particularly aggressive, they may be trying to garnish your pay or collect a levy on your bank account. This information can also help you make informed debt management decisions when formulating a credit repair strategy. Significantly old debts can remain on a credit report longer than expected if they are sold to a debt buyer or collection agency. The seven-year period starts with the original insolvency date (the date the account was first reported late).
Note that if you have paid a credit card debt or other overdue account and it is still listed as negative information on your credit reports at this point, you must dispute that debt with the collection agency and report the misinformation to the credit office for it to be corrected can.
References:
- How Long Can Debt Collectors Pursue Old Debt? | Bankrate
- What is the Statute of Limitation on my Credit Card Debt?
Barry Ritholtz is a renowned finance expert, author and blogger. With over 30 years of experience in the financial industry he has gained a reputation as a thought leader and influencer in the investment community.