When is a debt too old to go into collection?

The statute of limitations on debt varies from state to state

To Her Credit columnist Sally Herigstad
Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). She writes "To Her Credit," a weekly reader Q&A column about issues involving women, credit and debt, for CreditCards.com, and also wrote for MSN Money, Interest.com and Bankrate.com, and has guested on Martha Stewart Radio and other programs.

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Question for the CreditCards.com expert

Dear To Her Credit,
I have an 8-year-old, $8,000 credit card debt from when my son used my card nine years ago and never paid me back. I am on Social Security, and the credit card company says they are going to freeze my account and take me to court.

Can they do that? I live almost in poverty now. I do not see how I can pay this 8-year-old debt. Please advise me. -- Deb

Answer for the CreditCards.com expert

Dear Deb,
Most retirees get about $1,000 in Social Security benefits per month -- hardly enough to pay living expenses and try to pay off an $8,000 debt. Fortunately, the law is on your side. In fact, two laws may be on your side!

First, no matter what bill collectors say, by federal law they can't take your Social Security benefits. Even if they got a judgment against you, they couldn't attach it to the payments you receive from the Social Security Administration every month.

Second, you may not have to pay this debt because the statute of limitations in your state may have run out. In other words, the debt may be too old to collect. CreditCards.com recently researched the statute of limitations laws in all 50 states. The research allows you to look up your state's limit, and links to each state's statute, too.

At first glance, it doesn't make sense that a debt "expires" when it's not paid. However, if there were no statute of limitations on debt, someone could say you owed something from any time in the past -- even 30 or more years ago -- and you might think you had to pay it. After so many years go by, your chances of having good records of the debt or even remembering what you owed become slim. The statute of limitations keeps you from being at the mercy of creditors, scrupulous or otherwise, who want to dredge up old debts from the past.

The length of time it takes for your credit card debt to expire and when that time period begins depends on your state law. In many states, old credit card debt expires in six years or so. The period of time begins the last time you made a purchase or a payment or the date the credit card company charged off the debt. That means, if there has been no activity on the card for eight years, the debt is probably uncollectible. Check with the laws of your state to be sure.

Warning! Do not make even the smallest payment on this debt if you think it may qualify under the statute of limitations. You may inadvertently restart the time period by doing so.

Even though bankruptcy may look like an easy way out, don't even think about it over an $8,000 debt. Bankruptcy easily costs several thousand dollars by the time you pay all the fees -- and you will have to come up with that money from somewhere. It would be a shame to file for bankruptcy over debts that can't be collected anyway. If you don't have assets or income the creditor can get to, there's nothing they can do.

You do need to get the credit card company to stop calling you and causing you distress. Collection letters are bad enough, but collectors say things on the phone that they would never put on paper, and sometimes their tone of voice can really rattle a person. Collectors ask questions and put you on the defensive, and sometimes finagle more information out of you than they should have. They'll keep trying to collect, even if they know they don't have a case. That's their job.

Tell the credit card company to stop calling you and to contact you only by mail. They must comply. Then, when they send you something by mail, reply in writing and explain why you are not paying. Don't let them pressure you into paying with money you need to live.

See related: Know your rights: Fair Debt Collection Practices ActDebt collection sample letters, Statutes of limitations in all 50 states

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Updated: 11-24-2017