Is There a Time Limit for Collecting Debt?

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Dealing with debt collectors can be a harrowing experience, especially if they hound you at home on a major holiday like Thanksgiving. The best option is not to have debt, but if you do incur debt, you need to know your rights—and the rights of debt collectors.

Unfortunately, there's a lot of misinformation out there about debt collectors, how to deal with them, and what they can and can't do when collecting a debt. 

As time passes, you might expect an unpaid debt to go away. Unfortunately, debts don't just go away because you ignore them. Your creditors may stop contacting you for payment after a period of time, but collection efforts can resume at any time. If a creditor or debt collector contacts you about an old debt, they're likely within their rights.

Is There a Debt Collection Time Limit?

While there are laws that dictate how long debt collectors can take certain actions in regard to debts, there is no law that prevents debt collectors from continuing collection attempts.

If you haven’t paid a debt, the creditor can pursue indefinitely for the outstanding balance unless you settle the debt or have it discharged in bankruptcy. For example, a creditor or collector might call at all hours of the day or send threatening letters to get you to pay. The debt collector might even sue you or list the debt on your credit report if you're within the debt collection time frame.

That said, you can stop some collection efforts with the help of third-party debt collectors. If you want to stop a collector from contacting calling you and sending letters, you can always send a written cease and desist letter requesting the collector to cease communications. Keep in mind, you'll have to give this cease and desist letter to each debt collector who handles the account. And, the letter only applies to third-party debt collectors, not the original creditor with whom you created the account.

After the Credit Reporting

In their collection attempts, debt collectors are allowed to report your debt to the credit bureaus which will include the information 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, like a debt collection, can be listed on your credit report. The credit bureau can only list a past due balance on your credit report for seven years starting from the date of the delinquency. After that, the account should fall off your credit report, even if you haven't paid it.

Debt Lawsuits

In some cases, creditors or debt collectors can sue you for past due debts. After a certain amount of time, a debt is no longer legally enforceable, and, if you can prove it, you can avoid a lawsuit judgment. It is why debt collectors use threats and intimidation (such as calling you on Thanksgiving) to collect money owed. The period of time that a debt is legally enforceable is the statute of limitations. Once this time limit has passed, you can use the expired statute of limitations to challenge the credit card issuer who takes you to court over the debt.

If you're served with a lawsuit summons (which you must by law respond to), you should consult with an attorney in your state to find out whether the statute of limitations can be used in your case.

Even after the statute of limitations has passed, creditors and collectors can continue other collection efforts including reporting the debt to a credit bureau as long as the credit reporting time limit hasn't passed.