Can a Charge-Off Come Back After 7 Years?

If a creditor attempts to collect on a debt and fails, it may declare the debt uncollectible. On the business's balance sheet, it will charge off the debt as a loss. These charge-offs are reflected on the credit report of the person who incurred the debt. Although there is a seven-year limit on how long negative information such as charge-offs can appear on a credit report, creditors can sometimes attempt to collect after this time limit has expired.

Charge-Offs

Charge-offs are debts businesses have written off as uncollectible. When a debt is considered uncollectible, this determination is reflected on the debtor's credit report. However, the fact that the business has declared the debt uncollectible does not mean creditors will not continue to seek payment for the debt. Many collection agencies purchase old debt for pennies on the dollars, debt that has been declared uncollectible, and attempt to collect on it.

Credit Reports

According to U.S. federal law, negative information--information that brings down a person's credit score--can remain on an individual's credit report for a maximum of seven years. This means that, after a charge-off has been listed on a report for seven years, the credit reporting agency that updates the report must remove the charge-off. The agency is not allowed to put the charge-off back on the credit report, even if the debt changes hands.

Statute of Limitations

Each state has its set of statute of limitations for the collection of personal debt. Creditors can only seek payment of delinquent accounts for a certain number of years. The exact number of years varies, depending on the type of debt and the state in which the debt was incurred. In many cases, the statute of limitations is longer than seven years, which means that although the debt may not be listed on a credit report, a creditor can still try to collect on it.

Considerations

According to the financial reference website Card Report, the seven-year limit is based on the date of the original delinquency--the time when the debtor first fell behind and never became current again. For this reason, making additional payments will not make the charge-off reappear on a credit report after seven years have passed. However, payment in full, which would change the status of the charged off debt, would likely make the charge-off reappear on a credit report.