Debts that have been dormant can expire after a certain amount of time. The statute of limitations on debts varies from state to state – usually between three and six years. The clock starts ticking, in the case of credit cards, on the last day of activity in your account. It keeps ticking until either part of the debt was paid, or until the statute of limitations is reached.
Does this mean that we should just hunker down and never pay our debts? Of course not! Dishonesty is never good policy. But even if a debt has expired, there may be good reasons to resolve it anyway. Here's how this whole process works.
Credit Card Debt
Statute of Limitations
|Washington D.C.||3 Years|
|New Hampshire||3 Years|
|New Jersey||6 Years|
|New Mexico||4 Years|
|New York||6 Years|
|North Carolina||3 Years|
|North Dakota||6 Years|
|Rhode Island||10 Years|
|South Carolina||3 Years|
|South Dakota||6 Years|
|West Virginia||10 Years|
This article is guilty of it. We use the words "canceled" and "expired". That gives the impression that, after the statute of limitations is reached, the debt no longer exists.
A debt continues to exist as long as it is not paid. So what does the statute do? It means that a collection agency cannot win a court judgment against you on a debt that has reached its time limit. The debt continues to exist, your moral obligation to pay is there. What's more, this debt which you failed to pay remains on your credit report. That can hurt you.
Often, debt collectors go after the wrong person. When a credit card debt is past a certain age, the companies can sell the debt to a collection agency. Collection agencies can then sell the debt to other collection agencies. There is plenty of room for mistakes. In these cases, a debt that has reached the statute of limitations should simply be ignored.
The collection agency must give you written notice of the debt, its history and who the original creditor is. Use that to research this debt to find out if it is, in fact, a valid one. If it is, you technically do not have to pay it, although it is probably wise to do so.
Any action at all in a credit card account will reset the clock. That includes a payment, the promise of a payment, or continued use of the credit card. For example, if you are contacted by a collection agency, and make a commitment to pay, you have revived the debt. Be careful not to do this, unless you intend to pay the debt in full.
No, certain debts are enforceable in perpetuity. As a rule, anything you owe to the federal government, including student loans, has no expiration date. Credit card debts, however, are classic for a statute of limitations.
When you are in an intense situation, laden with the motion, clear and objective thinking become difficult.
Call them at at 1-866-603-6980 (9AM to 8PM Eastern time) for a free telephoned Debt Evaluation. Or click here to apply on their site. To be eligible for CuraDebt, you must have $10,000 or more in debt and be able to pay $200/month. CuraDebt does not operate in the following US states: CT, DE, GA, HI, ID, KS, KY, LA, ME, MT, ND, NH, NJ, NV, OH, OR, PA, PR, RI, SC, TN, UT, VT, WV and WY.