Does Debt Have an Expiration Date?

Debt settlementA popular question among people that struggle with debt is, “Does debt have an expiration date?” and, “How long will a debt show up on my credit report?” These questions are most commonly asked by individuals that have years-old debt, usually incurred during college or youth.

For example, many people that were given a college credit card defaulted, closed the account, and then didn’t think about it again. At least until they got a letter trying to collect the debt 10 years after the fact.

How Long Can Debt Collectors Try to Collect Debts?

Depending on how old the debt is, you may be protected from lawsuits from collectors seeking repayment. Debts that are outside of the statute of limitations are called “time-barred” debts. However, if you say the wrong thing to a collector, the statute may be restarted.

In order to find out if a debt is “time-barred” or not, you have to do some research.

  • Open-End or Closed-End Credit?
    • Open-End is typically a debt that you can use repeatedly, like a credit card.
    • Closed-End Is usually something that has a fixed number, a one-time payment such as a home or car.
  • What Was the Due Date on the Debt?
    • This will be important for determining when the clock started. For open-end debts the statute commonly starts when the first payment was due.
  • What Statute of Limitations Applies?
    • The statute varies depending on what type of debt, and where you are. In the District of Columbia, the statute is three years.

If a collector is harassing you about an old debt, consult an experienced bankruptcy attorney. A lawyer can help you determine whether or not your debt is older than the statute of limitations. There may be an option to simply present to a judge that the debt is “time-barred,” which would prohibit collectors from being able to sue you.

Will the Debt Expire?

The statute of limitations does not discharge debts. That means that collectors may still try to get you to voluntarily pay the debt, but they cannot sue you for it. There are ways to make a collector stop calling as well, but the debt will likely continue to eat away at your credit until you pay it or file bankruptcy to discharge it.

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