It really isn’t uncommon to sometimes have a credit card debt looming over your head. It’s also pretty common for that person to start panicking about it, and end up making a wrong decision. For the cautious ones, there are certain things you can do to cross this hurdle.
Does an unpaid debt credit report stay on credit history forever? Suppose till date, you have succeeded in tactfully avoiding the advances of the debt collection arm of the credit card companies, what happens in this case? Does the debt live on, or does it expire?
Statute of Limitations on Debt
When talking about any other debt, a very essential discussion is about the little matter known as the statute of limitations on debt. This statute is a pretty important bit of legislation, which goes hand-in-hand with the Fair Debt Collection Practices Act, which came about when the government saw that creditors could get a little too desperate to recover their funds. The whole idea behind it is nothing in life lasts forever and, hence, neither should your debt. Hence, as all others must pass, so it now has a ‘life span’ within which it must be collected, or else it ‘dies’ and is canceled. Therefore, once an item of debt has passed its entire life span, it can no longer be collected even if the creditor threatens to take you to the court―which, by the way, he cannot. So in this case, if this debt is not collected by the credit card companies from you over the life of the debt (which moreover varies from one state to the other) it becomes uncollected and stands canceled.
Of course, with credit card debt, the statute of limitations is a little bit complicated. The statute counts the years from the last transaction on the credit card. So the statute will apply only if you have not used the credit card for a certain number of years as specified by the state. If you suddenly use it, then the counting starts over again. So, basically, the statute of limitations invalidates the credit card.
Here’s a chart for the statute of limitations on collections that shows the number of years after which the debt is invalidated in the various states.
| State | Number of Years |
| Alabama | 3 |
| Alaska | 6 |
| Arizona | 3 |
| Arkansas | 3 |
| California | 4 |
| Colorado | 6 |
| Connecticut | 6 |
| Delaware | 3 |
| District of Columbia | 3 |
| Florida | 4 |
| Georgia | 4 |
| Hawaii | 6 |
| Idaho | 4 |
| Illinois | 5 |
| Indiana | 6 |
| Iowa | 5 |
| Kansas | 3 |
| Kentucky | 5 |
| Louisiana | 3 |
| Maine | 6 |
| Maryland | 3 |
| Massachusetts | 6 |
| Michigan | 6 |
| Minnesota | 6 |
| Mississippi | 3 |
| Missouri | 5 |
| Montana | 5 |
| Nebraska | 4 |
| Nevada | 4 |
| New Hampshire | 3 |
| New Jersey | 6 |
| New Mexico | 4 |
| New York | 6 |
| North Carolina | 3 |
| North Dakota | 6 |
| Tennessee | 6 |
| Texas | 4 |
| Utah | 4 |
| Vermont | 6 |
| Virginia | 3 |
| Virgin Islands | 3 |
| Washington | 3 |
| West Virginia | 5 |
| Wisconsin | 6 |
| Wyoming | 8 |
The Lowdown on the Statute
Of course, credit card companies and other creditors are not so dumb to let it go. They too will try every sly trick in the book to make you pay up. If you haven’t heard about the statute of limitations on debt, and do not know that the expiry date for the debt is close on your heels, the credit card company might threaten to sue you for payments, or to take you to court. Which means that if you hit the panic button, you will end up paying the money and the debt is paid before the statute is operational.
The second common trick employed by credit card companies is to offer you a pretty good deal so that you use your credit card and restart the statute countdown. Like I said, the statute is valid only if the credit card account remains untouched for the number of years specified. By getting you to use the card, the statute period starts over again.
If you do have an unpaid debt, it makes sense to rebuff any offers to use it ever again. If the credit card companies call and threaten to take you to court, do not make a show of ill-timed bravado and accept their challenge. Just wait while the statute of limitations clock ticks on.
