Managing Debt

Does Your Old Debt Have an Expiration Date?

Comments 22 Comments

We frequently get asked by readers what the statute of limitations are for debts, and for how long old debts can affect your credit. For example, one reader recently asked this question:

I have a friend that had a credit card when she was starting college, and used it to pay for car problems that arose, but then went over the limit, and had late fees, and finally cancelled the card, but I guess she never paid it off. She hasn’t had the account in nine years, and recently got a letter from a collection agency trying to collect on the old debt. Is there a limit to how long a collection agency can try to collect on this debt? Will this affect her current credit if she pays off this 9-year-old debt?

There are two important parts to this question, and they often get confused:

1. How long the debt collector can collect the debt and

2. How long old debts can appear on credit reports.

How Long Can Old Debts Be Collected?

Each state has laws, referred to as “statute of limitations,” that spell out the time period during which creditors or collectors may sue borrowers to collect debts. In most states they run between 4-6 years after the last payment was made on the debt.

A debt that is outside the statute of limitations is called a “time-barred” debt.

In some states collectors cannot try to collect at all once a debt is past the statute of limitations. In other states,, they cannot sue you but they may still try to collect the debt. There is a way to stop the calls that we’ll share in a moment.

Does that mean that once the statute of limitations has expired you won’t be sued for a debt? Not necessarily. Some debt buyers — companies that buy and try to collect very old debts — still go after borrowers and even take them to court. They know that most borrowers who are sued for old debts won’t show up in court and the judge will issue a “default judgement,” which may give them additional collection powers such as access to the money a debtor has in his or her bank account, or the ability to garnish wages to collect the judgment. To prevent this, all a borrower has to do is appear in court at the appointed time and explain that the debt is time barred. If that is correct, the lawsuit will be dismissed.

If you are contacted by a collection agency about a very old debt:

1. Ask the debt collector to send you written notice of the debt. This is required under the federal Fair Debt Collection Practices Act, even if you don’t ask. But by keeping the initial phone conversation to a minimum, you may avoid saying or doing something that could hurt you later on. (Scammers will say they aren’t allowed to do that, or will offer to email you something. Don’t accept that answer.)

2. Once you receive written notice of the debt, you have 30 days to request validation of the debt. Mail your request to the collector with a certified letter and simply ask them to validate the debt. You don’t have to give a reason for your request. You can simply say, I dispute this debt, please validate it.

3. While you are waiting for the response from the bill collector, contact a consumer law attorney or your state attorney general’s office to confirm the statute of limitations for the debt. (Consumer law attorneys who regularly represent consumers in cases against debt collectors often provide a free consultation.)

4. If you confirm the debt is too old, you have one of three choices. You can:

a. Pay it. If you know you owe the debt and you now have the ability to pay it, you can do so. Make sure you keep written records of the amount due and your payment. Sometimes these old debts get sold to multiple collection agencies and if you get another call about this debt you want to have proof you have paid it.

b. Settle it. If you know you owe the debt and want to try to make good on it but you can’t pay the full amount (or if the debt has been inflated by fees), then you may want to negotiate to settle it for less than the full amount due. This is tricky, though, because once you start negotiating you could reset the statute of limitations. You could wind up being sued for the entire debt. If you really want to go this route, your best bet is to talk with an attorney first.

c. Send the collector a letter telling them to leave you alone. You have the right to ask a debt collector to stop contacting you. Once you do that, they are only allowed to contact you to tell you if they are taking legal action against you. If you know the debt is outside the statute of limitations, state that in your letter and tell them not to contact you again. Don’t be surprised if they sell the debt to someone else, but they shouldn’t bother you again.

How Long Do Collections Affect My Credit?

Many of our readers confuse the statute of limitations with the amount of time that collection accounts can appear on credit reports. But they are two separate issues.

The length of time that collection accounts may remain on credit reports is seven years and 180 days from the date the consumer first falls behind on the original account. This requirement is found in the Fair Credit Reporting Act, a federal law. One of our forum moderators who goes by sanama51 describes it this way:

The CRTP (Credit Reporting Time Period) for collections is up to 7.5 years from the DoFD (Date of First Delinquency) on the OC (Original Creditor) account that led to the collection. The DoFD is the first date that someone gets behind on payments and never again gets caught up.

Even if one of these bills remains unpaid, it cannot be reported after that 7.5 years is up. The date an account was placed for collections is irrelevant here, so don’t let that confuse you.

The only scenario where an old collection account can affect your credit is if you are sued and the collector gets a judgment against you. That new judgment would have its own 7-year reporting period.

In the case of our reader’s friend, she should first find out the statute of limitations for credit card debt in her state. If it turns out the debt is not time-barred, then paying or settling it may protect her from being sued. But if it is too old, then she can choose to either pay it or send the collection agency a cease contact letter.

Image: Martin Lopatka, via Flickr

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  • Mike M

    Good article Geri – it seems like this is always a timely topic. Since we are rapidly approaching tax season, it’s probably worth mentioning that, if a borrower settles with the creditor (including a debt buyer or collection agency) for less than the full amount owed or if they send a cease communication letter to them and refuse to pay on a time-barred debt, they may receive a 1099-C for the amount forgiven/amount of the debt. Your readers who receive a 1099-C should definitely check out your excellent articles on the subject.


    Question, I had an auto loan that was 6 yaers in lenght, 72 monthly payments. About 3 months ago I thought I had mad my last payment, but kept on getting dunning notices that I owed an amount that was about $100 short of a normal payment(Mthly payments were $499, dunning payment was for $399. When i inquired to the loan company they stated that I had missed a payment. i went on line to there web site looked at all my payments, seems I made 74 payments on a 72 payment loan. When i brought this up tp them the first response was prove it, I said check my payment history site. They said the payment due was now related to interest. When I told them I still made 2 extra payments and to apply that to the balance open and send me a refund, I shortly received a “we have to protect our interest E-mail and will take the auto if the payment is not received by a certain date. I paid the amount. Now what do I due?

    • Gerri Detweiler

      Who is the lender?

  • Walter Lobo

    Great information.
    First, if an unpaid credit or any type usecured loan exists, upon receipt of collection agency letter, seek (1) validation letter in the form of “original documents”, not any documents. (2) seek validation within 30 days of the date of the collection agency letter, and (3) seek their reply within 30 days of your letter seeking validation. If the “original documentation”, does not exisits, the credit or oan company would NOT be able to file a suite (claims) in the court. One requires copies of the original documentation to file a claim. Nine out of ten times, credit company lacks the original documentation, which invalidates their claim against you.

  • Pingback: A Debt Collector Came After Me for $8.97()

  • Skippadoodoo

    I work as a consultant . . . . In 2007 the bottom dropped out and for the next five years I averaged 3 months of work and nine months of unemployment. I am a single homeowner with a 15 year fixed rate mortgage on my home of almost 30 years. I had perfect credit and almost 29 years of continuous employment (not a single day between jobs). I stopped paying my unsecured debt (credit cards) after my unemployment expired. That is what I used to keep these accounts current but with no income, a mortgage to pay and a house to loose I told the credit card folks to pound salt. In the 3 & 1/2 years that I tread financial water, they got their principle back and some interest too. I tried to negotiate with them and the best I could do at the time was about $.60 on the dollar. I had about $40,000.00 in credit card debt so there was no way I could do this. So, almost three years ago I unplugged my home phone and began the game of cat and mouse with the collectors. My home phone will be reconnected in January of 2015 and I will have three more years of bad credit after that. I have always lived within my means and been a responsible borrower. The financial services industry and those that were living beyond their financial means screwed the economy and the rest of us. At 57 years old retirement isn’t even in the picture. I now drive three hours round trip every day so that I can work and work with folks that are all 25 to 30 years younger than I am. I resent what happened and what was taken away from me through no fault of my own. Now I hear advertisements stating that mortgages are available for people who have had BK’s or short sales that are 12 months old are older. You have got to be kidding !!!

    • Savannah Nash

      been there done that FEEL your pain!!!!

      • Skippadoodoo

        Some good news. Even though I was “sewer served” in January of this year (quashed that defective service) and the creditor canceled the debt and sent me a 1099, the debt buyer continues to come after me for the entire amount ($15,000 now with penalties, interest and attorney’s fees).
        They made a fatal error when filing the complaint by not including a copy of the original credit card agreement with the complaint and summons. My state requires that. So, I have a hearing date of May 1st, will be served when I walk into court and then will motion the court for dismissal because of the fatal error and because I will have paid income taxes on the principal of this debt.
        In addition, I will be counter suing for damages (just $500) for malicious and pernicious prosecution and malfeasance. It will give me alittle satisfaction getting some money from somebody who makes their entire living off of the backs of hard working middle class Americans like me who lost everything in 2007 due to the greediness and dishonesty of the financial services industry!
        And I have done all of this by myself. I am not represented by any attorney. If folks take the time to understand the process, it is almost inevitable that they will be able to find mistakes and find true justice for these bottom feeding dirtbags (aka debt buyers).

  • Credit Experts

    Cindy —
    You will want to get your credit report from each of the three major credit reporting agencies to see if this bill is showing up on all of them. You will need to dispute it with each agency, and then you should be able to get it removed from your credit reports. Here are some resources that can give you some help and direction for getting it done.

    A Step-by-Step Guide to Disputing Credit Report Mistakes

    I Want My Free Credit Reports

  • Gerri Detweiler

    When were you late on payments? If they are more than 7 years they should be off your report. If more recent, and they are accurate you always have the right to request an investigation, but they may be confirmed as correct by the lender. If they aren’t they will no longer be reported. If they are confirmed, they can legally they can be reported for 7 years from the date you were late.

  • Gerri Detweiler

    You have two choices. One is to seek help from a consumer law attorney with expertise in debt collection and credit reporting matters. If they think you have a good case (I am not an attorney but it sure sounds like it!) they may take your case for free as the collection agency would have to pay their fees if they broke the law. Visit to find one in your area.

    Your other option is to file a complaint with the Consumer Financial Protection Bureau.

    And you’re welcome! :)

    • Jody

      That’s the conclusion I came to as well. I have already CFPB and have a case pending.

      Thanks again! :)

  • Gerri Detweiler

    I need more details on the first issue. What kind of items are you talking about and what are the dates involved?

    As for the overlimit issue, if they are reporting the correct current balance and limit then it is not inaccurate and he’s probably stuck – despite the fact that it wasn’t his fault they lowered the limits.

    If he’s been struggling with this debt for a while he may want to look into credit counseling:
    5 Ways To Get Out of Debt: Which Will Work for You?

  • Coral Mercintile

    Nice stuff posted about debt repayment. I think, debt collection agency can chase you until you die and after your death they will chase your family and your kids.

  • Gerri Detweiler

    Brina –

    I am not sure I understand the situation. Typically creditors must get a judgment before they can garnish wages (though that’s not always the case with federal student loans and federally guaranteed debts.)

    When was this judgment entered by the court? Was it before or after your wages were garnished? When was it paid off?

    I’d need more information to point you in the right direction.

  • Gerri Detweiler

    Is there an outstanding judgment against you? Check your credit reports. If there is a judgment, then yes, they may be able to still try to collect it.

  • Gerri Detweiler

    I am having a hard time following your comment, but you need to find out whether the statute of limitations has expired. The statute of limitations is a matter of state law, and usually starts when you last made a payment. (sounds like 5/2009). This chart may help point you in the right direction: Statute of Limitations On Debt Collection by State

    Some red flags are going up here. You told them the statute of limitations expired and then they tell you they are going to “serve you with a certified letter.” What the heck does that mean? Sounds like a scare tactic to me, and possibly illegal if you told them the statute of limitations had expired.

    Do you even know if this collector is legitimate? I’d suggest you proceed with caution.

  • Gerri Detweiler

    Carey – Please talk with a consumer law attorney as soon as possible. It is possible that the collection agency’s actions are illegal (or they may not be) but I think it’s good be hard for you to sort through yourself. You should be able to get a consultation for little or no cost from a consumer law attorney. Visit the website of the National Association of Consumer Advocates. You may also be eligible for free legal assistance through your local Legal Aid office. Here’s another article I suggest you read: Help! I Found a Judgment on My Credit Report.

  • Gerri Detweiler

    No. Collection accounts may be reported for 7 years plus 180 days from the date you fell behind with the original lender. The issuance of a 1099-c doesn’t change that. Please read this article: What is a 1099-C? Your Top 11 Questions Answered

  • Gerri Detweiler

    What about the statute of limitations? What state do you live in? In many states it is four or five years.

    We’ve written about ways to defend a debt collection lawsuit here: Seven Ways To Defend a Debt Collection Lawsuit

    Whether or not you can use the payment protection plan as a defense would depend on the facts and circumstances. One thing I suggest you do is research the payment protection plan you had. Some state attorneys general and federal regulators have taken enforcement actions against some of those plans. If the plan you purchase was covered by one of those actions that may help.

    The second thing I’d recommend is that you talk with a consumer law attorney. They will be able to identify defenses to the lawsuit faster than you probably can. They may also be able to provide you with some helpful information if you decide to proceed pro se. If you are having trouble finding an attorney I suggest you use the search function on the websites of the National Association of Consumer Advocates or the National Association of Consumer Bankruptcy Attorneys.

  • Gerri Detweiler

    Hope that works out for you.

  • Credit Experts

    Probably not. You can check your state’s statute of limitations here:
    Statute of Limitations On Debt Collection by State

  • Jeffrey Smith

    3 months wages if you have no other bills, don’t eat or drive to work.

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