With the exception of debts you owe to the government, all debts have a legal statute of limitations for collection. This protects you from old, unpaid credit card debt haunting you forever. Debts that are no longer within the statute of limitations are known as "time-barred" debts.
Facts
The statute of limitations for credit card debt is the amount of time that a creditor has to legally enforce a debt through the courts. Even after the statute of limitations has expired, a creditor may still attempt to collect the debt through other means.
Time Frame
The statute of limitations begins 180 days after you make the last payment on the debt and varies depending on your state of residence. Making a payment at any time, however, may reset the statute of limitations and leave you vulnerable to a lawsuit.
Misconceptions
The statute of limitations of a debt is commonly confused with the length of time that a debt may appear on your credit report--known as the "reporting period." The reporting period for unpaid credit card debt is 7 years, while state laws regarding how long a debt is subject to a lawsuit can range from three years to 10 years.
Considerations
A creditor may attempt to sue you for a debt at any time. The statute of limitations does not protect you from being sued, but it does protect you from the lawsuit being successful if you notify the court that the time period for legal enforcement of the debt has expired.
Warning
If you receive a summons for a debt that is no longer within your state's statute of limitations, you must respond to the summons, agree to appear in court and notify the court that the debt is time-barred. If you do not, the creditor will win the case by default and may then attempt to garnish your wages or seize your bank accounts.
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