When does debt get too old to collect?

Each state has a statute of limitations on credit card debt

The Credit Guy columnist Todd Ossenfort
Todd Ossenfort has been chief operating officer for Pioneer Credit Counseling since 1998. He writes our weekly "The Credit Guy" column, answering reader questions about credit counseling and debt issues.

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Question for the CreditCards.com expert

Dear Credit Guy,
I heard on NPR that there is such a thing as a statute of limitations on credit cards. If so, how would I look it up for an individual bank card balance that has gone through numerous debt collectors? -- Bear

Answer for the CreditCards.com expert

Dear Bear,
Yes, there is a statute of limitations (SOL) for collecting credit card debts that varies by each state. For example, in South Dakota, credit card debts may legally be collected in the courts for six years. Pennsylvania, on the other hand, allows only four years for those accounts. You can find the details for your state's statute for credit card accounts in the CreditCards.com article, "State statutes of limitation for credit card debt." Beware, however: As carefully as we've researched the statutes, applying them to individual cases can be tricky, depending on whether the debt was incurred in multiple states, or if you've moved since they were incurred. They can also change at the whim of a an individual judge, or with legislative tinkering. Your best bet is to seek out individual legal advice. And it gets even more complicated: Other types of debts have a different time frame for collection in court, so check your state's attorney general website to learn the complete statutes for collecting debts.

Now that we've established how you can learn about the statute that applies in your state, I have to mention that the statute only affects collections when suing in court. Even if a debt has passed the statute of limitations you may still have to deal with collectors. Some collectors tend to be more aggressive when pursuing debts that are still within the statute of limitations, but collections do continue after the SOL has expired.

When you are contacted about a debt that is past the statute of limitations, inform the collector that you know the debt can no longer be collected in court. Then tell the collector to stop contacting you about the debt. The Fair Debt Collection Practices Act prevents collectors from contacting you again once you have sent a cease-and-desist letter. However, it does not prevent the debt from being sold to another collector,  who can then begin the cycle all over again.

Keep in mind that the statute of limitations does not prevent the collector from filing a suit anyway to collect the debt. It just prevents the collector from winning a  judgment if you show up to defend your side of the case and cite the statute as your defense. This seems disingenuous I know, but is unfortunately the case. To protect yourself, watch your mail for a summons from a collector  for a court hearing. If you receive one, be sure to do what is required of you and state that the statute of limitations has expired.

One last item to consider: The statute of limitations for debt does not prevent the negative item from appearing on your credit report. The item will remain on your report for seven years from the first date of delinquency (typically when the account is 180 days late). And although paying the collection account will not immediately improve your  credit score, lenders like to see that you pay what you owe, even if it was quite late.

Take care of your credit!

See related: State statutes of limitation for credit card debt, Know your rights: Fair Debt Collection Practices Act, 11 tips for dealing with debt collection, collectors, Debt collection sample letters

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Updated: 01-19-2018