Time Limits for Old Debt to Expire

Laura Adams, MBA
1-minute read

Many people are confused about how long old debt can haunt them and whether they should pay it off. Here are the two time limits that apply to old debt:

Debt Time Limit #1: Your Credit Report

Unpaid debt gets wiped off your credit report 7 years after the date you initially missed a payment. Making a payment on an old debt doesn't reset the clock and cause negative information to stay on your credit report longer than a total of 7 years.

Debt Time Limit #2: Your State's Statute of Limitations for Debt

You legally owe a debt unless it's forgiven or discharged through bankruptcy. Creditors can attempt to collect from you forever, but they can't sue you once the Statute of Limitations for Debt has expired. This legal window varies widely by state and by the type of debt. In general, it begins from the date of your last account activity--such as a credit card charge or a loan payment. In some states making a payment on an old debt or even agreeing to a repayment plan can reset the clock on the statute of limitations.

Debt image courtesy of Shutterstock

About the Author

Laura Adams, MBA

Laura Adams received an MBA from the University of Florida. She's an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers is her newest title. Laura's previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.