What Happens After Eight Years on My Debt?

Sometimes, debts go away and sometimes they linger for a longer period of time. Depending on the laws of the state in which a debt is issued, an old debt may still be collectible by creditors. However, in many cases, an old debt will no longer be eligible for collection, as it will have passed the state's statute of limitations. However, an eight-year-old debt will likely not be listed on a person's credit report.

Statute of Limitations

Each state has its own laws regarding how long a creditor can go after a debtor for the payment of a particular debt. Generally, this length of time is dependent on the type of debt that the person owes. For example, a state may have a different statute of limitations for a debt that is tied to an open account than for one tied to a written contract. This statute could be longer or shorter than eight years.

Debt Collection

After a statute of limitations has expired, a creditor is legally prohibited from pursuing collection of the debt. This means that the creditor must immediately stop all collection actions. However, if a case against the debtor is currently being pursued in court, then the case can continue so long as the lawsuit was filed before the statute expired. However, the creditor can no longer even contract the debtor about the debt.

Extensions

There are many ways in which a statute of limitations can be extended. For example, if a creditor has been awarded a civil judgment against the defendant, a judge can order that the statute be renewed or extended. In addition, a statute may be automatically reset if there is a change in the debt's payment status. Generally, if a debtor makes a new payment on a debt, the statute will restart from the beginning.

Credit Report

Just because a statute of limitations has expired, this doesn't mean that a record of the debt has been removed from the individual's credit report. This credit report contains a record of all of an individual's recent debts. However, negative information, which includes unpaid debts, may be listed on a credit report for a maximum of seven years. If they are still listed after eight years, an individual can demand that the credit reporting bureau remove them.