Over time, you can expect unpaid debt eventually. Unfortunately, debts don’t just go away because you ignore them. Your creditors may stop contacting yours for payment after a period of time, but collection efforts may continue at any time. If a creditor or debt collector contacts you with old debt, they are probably within their rights.
Is there a deadline for debt collection?
While there are laws that dictate how long debt collectors can take certain actions with debt, there is no law that prevents debt collectors from continuing their collection attempts.
If you have not paid the debt, the creditor may continue indefinitely unless you have settled the debt or discharged it in bankruptcy. For example, a lender or collector may call or send letters to pay you. A debt collector can even sue you or list debt on your credit report if the timeframes for these actions have not passed.
You can stop some debt collection efforts with debt collectors. If you want to stop the collector from contacting you, such as calling and sending letters, you can send a written interruption and release the letter from the collector to request a disconnect. Keep in mind; you will need to interrupt and cancel the letter to each debt collector handling the account. This letter applies only to third party debt collectors and not to the original creditor with whom you created the account.
Collecting after a timeout
In trying to collect debt, debt collectors can report their debt to the credit bureaus that will be included in your credit report.
Anyone who checks your credit report will be able to see the collection account. Fortunately, the law limits the amount of time a negative account, such as debt collection, can be listed on your credit report. The credit bureaus can only record the outstanding balance on your credit report for a period of seven years from the date of reinstallation.
After that, the account should drop from your credit report, even if you didn’t pay it.
Other collection activity can continue even after the debt has fallen off your credit report.
Timeline for debt lawsuits
In some cases, creditors or debt collectors may sue you for arrears. After a period of time, the debt is no longer legally enforceable and, if you can prove it, you can avoid a judgment. The time period legally enforceable is the statute of limitations. Once that deadline has passed, you can use outdated statutes of limitations to challenge a credit card company that takes you to court over that debt.
If you are being subpoenaed, consult with a lawyer in your state to find out whether statute of limitations can be used in your case.
Even after termination of the statute of limitations, creditors and collectors continue other collection efforts, including reporting debt to the credit bureau until the deadline for reporting the loan has passed.