Debt does have a statute of limitations. This limits how long a creditor or collector has to sue to recoup any unpaid balance. Statute of limitations, also knowns as SOL, does vary by state and debt type. Usually, it is between 3 to 6 years, though some do have longer windows. However, you should never treat the SOL as a solution to money trouble. The SOL does not have anything to do with how long debts appear on your credit report. Unpaid debt can appear on your credit for 7 years or longer.
Frequently Asked Questions about the Statute of Limitations
- How long is the SOL for my debt? Usually the statute starts either when you fall behind, or from the date of your last payment. The length can of time depends on state law and what type of debt it is.
- Can a debt collector try to collect after the SOL has expired? In most cases, yes. However, should you tell the collector to not contact you again, they must stop. It’s best if this request comes in writing. Once they receive the request, they can only contact to notify you of receiving the request, or to notify of legal action.
- Can I still be sued if the SOL has expired? If you are sued after the SOL has expired you can use the expiration as a defense against the lawsuit. However, many consumers do not appear in court and this allows the creditor or collector to get a judgement against them. This is one reason to never ignore legal notices about a debt.
- Do I pay the old debt? This is a judgement call. However, you should be aware that if you pay, even a small amount, you can restart the SOL.
- Does debt still appear on my credit report after the SOL has expired? Generally, yes. The length of time that negative information gets reported is covered by the federal Fair Credit Reporting Act. Most negative information can be reported for seven years.