A credit card company can attempt to collect on a debt for the rest of your life. There are state laws governing how many years credit card companies have to successfully pursue you in court for unpaid debts, and there are federal laws restricting how long the delinquent credit information can remain on your report. But there are no laws forcing the debt itself to expire.
Misconceptions
Statute of limitations laws, which vary by the state, govern how long credit card companies have to successfully sue you in court. The average is about six years, according to BCS Alliance, a credit and debt website. It's a common misconception that an expiring statute of limitations makes the debt impossible to collect. Credit card companies can continue to contact you for payment. However, BCS Alliance reports that without the threat of legal action, card companies often have little leverage to collect on old debts. Debts outside the statute of limitations are considered "time-barred" for court action, according to BCS.
Considerations
Old credit card debts can remain on your credit report for seven years, according to the Federal Trade Commission. After that the information is considered outdated and must be removed from your credit report. Theoretically, you could choose to ignore a credit card debt that is no longer being reported on your credit report and is beyond your state's statute of limitations for legal action. Although the debt remains valid, the card company is left with virtually no leverage under that scenario. The delinquent account is no longer hurting your credit score and the card company knows that it cannot successfully sue you and force wage garnishment.
Significance
BCS Alliance reports that state statutes of limitation laws were created to bring a measure of fairness to debt collection and to keep people for worrying the rest of their lives about being sued. BCS Alliance notes that you can still be sued for a debt that is outside of the statute of limitations, but that the case will be dismissed by the judge once you or your attorney appears in court and points out that the account is time-barred for legal action.
Warning
It is best to respond in writing to a credit card company or debt collector contacting you about a credit card debt that has expired under your state's statute of limitations. BCS Allliance says that you should advise the card company in writing that the debt is now time-barred and that you should not be contacted about it again. The site says you should never admit that you owe the debt or that you are willing to make payments. Doing so could result in the statute of limitations being reset, and the card company could immediately sue.
Prevention/Solution
Eliminate worry about old debts by making payments to resolve them while they are still within your state's statute of limitations for legal action. You may be able to pay off the balances for less than the amount owed through a process called debt settlement. "The New York Times" reported in 2009 that some credit card companies were settling delinquent credit card accounts for 20 to 70 percent of the balance. Settlements for around half the balance are more common, however.
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