You hold full legal responsibility for paying credit card debt you incur. Failing to do so can result in legal and financial consequences. If a creditor intends to use legal force to recover your defaulted credit card debt, however, it must do so within a given time frame. As credit card debt ages, the benefits of paying off the debt decrease along with the consequences of nonpayment.
Statute of Limitations
Credit card companies and collection agencies can sue you for unpaid credit card bills -- but only for a few years. Statutes of limitation in each state prevent creditors from filing lawsuits on accounts that have been delinquent beyond a certain period. States' statutes of limitations vary.
Even if the statute of limitations on your debt has passed, it's still in your best interests to pay it off. Not all creditors abide by the law and disreputable creditors have been known to illegally file out-of-statute lawsuits against consumers.
Reporting Period
A defaulted and charged off credit card debt serves as a black mark on a credit report. Should a collection agency purchase the account, its notation on your credit record also tarnishes your credit report. The Fair Credit Reporting Act permits creditors to report your default for seven years from the date the original account was charged off. Regardless of whether you satisfy the debt, all accounts related to your old credit card debt disappear after seven years. Paying the debt does not help your credit if the accounts reflecting the debt no longer appear on your credit report.
Payment Benefits
Beyond a certain point, your creditors cannot force you to pay via a lawsuit or use your lack of payment to hurt your creditworthiness. This does not mean that you do not still owe the debt, and your creditors will continue to contact you about your outstanding balance indefinitely.
Should you pay off the old debt, the collection calls will stop. In addition, paying your credit card debt stops interest from accruing on the account and provides you with the peace of mind that comes from knowing you satisfied your financial obligations.
Considerations
It's up to you whether or not to pay old credit card debts. Your creditors can demand that you pay, but they cannot force you. If you make a partial payment on the debt, however, the statute of limitations begins anew -- providing your creditor with the ability to file suit against you for the remainder of your bill. Thus, if you intend to pay your old credit card debt, it is imperative that you pay it in full or obtain a written debt settlement agreement from the credit card company or collection agency proving that the company agreed to accept partial payment for the debt as payment in full.
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