What happens, after 7 years, if your credit card debt has been charged off, and sent into collections?
November 7th, 2009
satillarivergal asked:
I have old credit card debt! I haven’t paid in 7 years.-And nobody contacts me anymore.I am not proud of it, and realize I need to do something about it. I got a credit report online from Equifax. It showed no debt. Just one card that was in good standing.What’s up with that? I was hoping to get the names of the card I owe to try to clear up some of the debt.Surely the debt doesn’t go away!Should or Can I just try to rebuild my credit?What do I do?
I am certain that the statue of limitations in my state is 7 years. But certainly, if I try to get a loan, this bad credt will show up? It surely doesn’t just dissappear? Right?
I have old credit card debt! I haven’t paid in 7 years.-And nobody contacts me anymore.I am not proud of it, and realize I need to do something about it. I got a credit report online from Equifax. It showed no debt. Just one card that was in good standing.What’s up with that? I was hoping to get the names of the card I owe to try to clear up some of the debt.Surely the debt doesn’t go away!Should or Can I just try to rebuild my credit?What do I do?
I am certain that the statue of limitations in my state is 7 years. But certainly, if I try to get a loan, this bad credt will show up? It surely doesn’t just dissappear? Right?
After seven years the debt is erased.
The only thing that happens after 7 years is that the credit reporting agencies can no longer report it. Now the one caveat is that the 7 years is calculated from the date of last activity; so, for example, if you decide that you felt bad after 5 years a made a payment. You start the clock all over again. The 7 years has nothing to do with the statute of limitations in your state. Each state has statutes which explain how long a creditor has the legal option to sue you. Your debt may not show up on your report, but if you live in a state with, for example a 10 year statute, your creditor or the owner of the debt can sue you. You should check out your state’s information in greater detail.
Peter is wrong. Your credit report begins on the day of the default, not the date of last activity. It’s clearly stated in the Fair Credit Reporting Act, and policy statements from the Federal Trade Commissioners. If anyone wishes to state otherwise I would greatly appreciate that they supply me with their information source.
Your credit score is based on what is currently in your credit report. If you don’t see any negative reports, then your credit score should be pretty good now, and there is no need for you to do anything.
About the Statute of Limitations (SOL), that is the time that the creditor can legally sue you. After that date, you have no legal obligation to pay. However, they can still pursue you for payments. They just don’t have any legal way to collect if you don’t want to pay them.
Do not feel bad about not paying them. For the past 7 years they screwed up your credit history, made it hard for you to get a loan, or in some cases caused you to pay more in insurance fees. In other words, you paid your debt!
By the way, check all three of your reports, not just Equifax. Go to the link below and order a free copy of each.