What Happens To Unpaid Credit Card Debt After 7 Years

You may have heard that unpaid credit card debt goes away after seven years, and that's partially true. However, it's a bit of an oversimplification. As long as you have an outstanding balance, you owe the debt. But after some time goes by, the game changes because of a few key laws. 

Learning about what happens to your debt after seven years could help you make an informed decision about how best to handle it.

How Unpaid Credit Card Debt Affects You After 7 Years

Your unpaid credit card debt is usually taken off your credit report after seven years. You're still responsible for paying what you owe, because the debt itself won’t go away. But it shouldn’t affect your credit score any longer. 

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Do You Have to Pay a Debt After 7 Years?

Unpaid credit card debt doesn’t go away after seven years—but it’s possible that no one can make you pay it. 

State laws on collecting debt limit what creditors can legally do. The statute of limitations varies depending on where you live and what type of debt you have. Most of the time, it ranges from three to six years. But it can be as long as 20 years. After the statute of limitations expires, the creditor can no longer sue you for the debt, get a judgment against you, garnish your wages, or take any other legal action (though they might try). If they take you to court, you could ask the judge to throw out the case.

It’s important to note that statute of limitations timelines could reset if you make a payment. Suppose a debt collector comes to you with credit card debt that you haven’t paid for almost seven years, and asks for a small payment to show that you’re willing to take care of the debt. If you make any payment, the clock could start again, making the debt legally collectible for another seven years. 

It’s a violation of the federal Fair Debt Collection Practice Act for a debt collector to sue you if it knows the statute of limitations has passed.

Does Unpaid Credit Card Debt Disappear After 7 Years?

Unpaid credit card debt doesn't vanish, even if it disappears from your credit report after seven years. You’re still on the hook for the amount you owe to your credit card issuer. One exception is if you file bankruptcy and your credit card debt is discharged (forgiven). 

Can Debt Collectors Still Pursue Payment After 7 Years?

Debt collectors can pursue payment forever. However, all states have a statute of limitations for collecting debt. That means debt collectors have to sue you within a certain number of years, or they lose the right to sue you. Statutes of limitation range from two to 20 years, and most are between three and six. In other words, debt collectors can ask you to pay, but they could lose in court if you can prove that the time limit has passed.

Can Debt Collectors Call Me After 7 Years?

Debt collectors can call you after seven years, but they must follow state and federal laws. The federal Fair Debt Collection Practices Act (FDCPA) prohibits debt collectors from calling you repeatedly or with intent to harass, oppress, or abuse you. A debt collector can’t call you about a particular debt:

• More than seven times within seven days

• Within seven days after talking to you on the phone about the debt

Federal laws also limit when debt collectors can call you, and require that they stop contacting you when you tell them to. They can’t call at an unusual or inconvenient time, such as before 8 a.m. or after 9 p.m. They also can't call you at your work if they know your employer doesn't permit personal communications on the job.You can notify the debt collector in writing that you don’t want to receive any more calls, and they must comply.

These rules only apply to calls placed by the debt collector to you. Different rules apply to text messages, emails, in-person interactions, or social media (for more detailed info, you can check out the Consumer Financial Protection Bureau). 

Even if a debt falls off your credit report after seven years, debt collectors may still try to get you to pay part of a debt by saying you have a moral obligation to. That’s between you and your conscience, but the statute of limitations in your state is the legal rule you should definitely pay attention to.

Be careful—making any payment can reset the clock, putting the debt back on your credit report for seven years, and giving a debt collector another chance to sue you for the debt. Even admitting that you owe the debt can restart the clock under some circumstances. That’s why it can be smart not to talk to debt collectors at all unless you intend to pay.

The way to deal with collection agencies is to get information from them, and then make a decision about the best thing to do.

How Does Unpaid Credit Card Debt Impact Your Credit After 7 Years?

In most cases, unpaid credit card debt doesn’t have an impact on your credit if it’s no longer on your credit report. But debt no longer showing up may not lead to a boost in your credit score. It depends on how you've handled your other debts over the last seven years. If you’re working on improving your credit score, focus on making on-time payments and avoiding new loans if possible.

Ways to Pay Off Unpaid Credit Card Debt

If you'd like to pay off your credit card debt so that your creditors and collection agencies will leave you alone, there are a few things you can try.

Balance transfer card

This is a type of credit card that may not charge interest for the first few months you own the card. This could make it easier for you to pay off what you owe. After the introductory period ends, your remaining balance accrues interest at the card's standard interest rate.

A credit card balance transfer could be an option if your unpaid credit card debt hasn't yet reached a collection agency. If it has, consider the other strategies listed here.

Personal loan

A personal loan is a type of loan you take out from a bank, credit union, or online lender that you can use for any purpose. Most personal loans have a fixed interest rate and a set monthly payment. Some lenders work with those who have fair to poor credit. These loans don't have collateral—something the lender can take if you don't keep up with your payments.

Credit counseling

Credit counselors work with you to review your budget and come up with a debt payment plan. Then you make regular monthly payments to the credit counselor, who pays your creditors.

Debt settlement

Debt settlement is when you negotiate a deal with the creditor or collection agency to get them to accept a smaller amount and write off the remaining debt. You can do this yourself or work with a debt settlement company. This process could help you get your credit card debt off your plate for less than the full balance.