Old Debts

My debt is several years old. Can debt collectors still collect?

In most states, if the debt is yours, the amount is correct, and the debt collector is entitled to collect, the collector can continue to ask you to pay the debt. If you are sued, you may have a defense to the lawsuit due to the age of the debt.

The CFPB’s Debt Collection Rule clarifying certain provisions of the Fair Debt Collection Practices Act (FDCPA) became effective on November 30, 2021.

In most states, the debt itself does not expire or disappear until you pay it. Under the Fair Credit Reporting Act, debts can appear on your credit report generally for seven years and in a few cases, longer than that.

Under state laws, if you are sued about a debt, and the debt is too old, you may have a defense to the lawsuit. These state laws are called "statutes of limitation." Most statutes of limitations fall in the three-to-six year range, although in some jurisdictions they may extend for longer depending on the type of debt.

Statutes of limitation may vary depending on the:

• Type of debt
• State where you live
• State law named in your credit agreement.

The statute of limitations may also be affected by terms in the contract with your creditor and, if you've moved, by laws in the state where you are sued. You may want to consult with a lawyer to learn how this period is calculated and when the period may have started with respect to your debt.

In some states, a partial payment on an old account may restart the time period during which you can be sued. Similarly, in some states, sending a written statement acknowledging that you owe an old debt may restart the time period during which you can be sued.

If a debt collector sues over a debt that has gone unpaid for longer than the statute of limitations period, you have a defense to the lawsuit. If you are sued, and you think the statute of limitations has passed, you may want to consult an attorney. It is a violation of the Fair Debt Collection Practice Act for a debt collector to sue you or threaten to sue you if it knows the statute of limitations has passed.

How to avoid resetting the clock on old debt

It’s true that some types of debt will “expire” after three to six years — meaning a debt collector can no longer sue you for them. However, there are some things you can do that restart the clock on old debt, making it live longer than it needs to. If you’re dealing with old debt, make sure you’re taking the right steps to avoid starting over.

How does old debt work?

Old debt will likely affect your credit reports for seven years after it was first marked delinquent. Most states have a statute of limitations that sets the time a debt collector has to take action against you — like suing you — for an old debt you haven’t repaid. The statute of limitations depends on the type of debt and where you live, but for most states, it’s typically three to six years.

While a debt collector can’t sue you for a debt that is older than your state’s statute of limitations, they can still make an attempt to collect the debt. This means they can continue to call and send letters to get you to pay up. Having old debt on your record can also impact your other finances, including your ability to qualify for credit cards and loans.

As long as you don’t take action on your debts, the statute of limitations will continue to run. Within that time frame, creditors and debt collectors can reach out to you to recoup old debt and even attempt to collect by suing you. If the debt is time-barred (meaning the statute of limitations window is closed), creditors won’t be able to sue you for it, but they may still try to collect on it.

What can restart the clock on your old debt?

Restarting the statute of limitations can happen in a few ways, including:

• Making a payment: Making a payment on an old debt, whether in full or part, revives it, essentially restarting the clock on old debt.
• Agreeing to pay: If you acknowledge that the debt is yours and agree to pay, the statute of limitations on your debt will start over.
• Making a charge: If you have old credit card or revolving debt and you make a charge to your account, the clock on your old debt will restart.
• Having a discharge in bankruptcy revoked: When you discharge debt through bankruptcy without objections from creditors, they can no longer collect on the debt through legal means. However, in some cases, the discharge can be revoked if the court finds that your debt was discharged fraudulently.

Remember that when the statute of limitations on debt restarts, it starts from the beginning. So if your statute of limitations is seven years and you make a charge to the account after six years of being dormant, it will be an additional seven years before the statute of limitations runs out.

3 ways to avoid restarting the clock on old debt

If you’ve decided to wait for the statute of limitations to expire on your debt, you can take a few steps to avoid restarting your debt’s clock.

Record the start date

The statute of limitations begins when the debt was first reported as delinquent. To learn this exact date, pull your credit report from AnnualCreditReport.com. The debt will likely fall off of your credit report after seven years. In some states, the statute of limitations could last longer, so make a note of the start date as soon as you can.

Don’t admit to it

If debt collectors contact you trying to get you to pay up, be mindful of your language. Ask about the original creditor, the date or time period of when the old debt took place and any other identifiable information. But try not to admit that it’s yours. Even if it is, you can pay on your own time once the debt is time-barred instead of restarting the statute of limitations.

Check your state laws

Since time-barred debt laws vary by state, you should make sure you know what your state laws are before taking action (or inaction) on old debt.

What should I do about time-barred debt?

If you have time-barred debt, deciding what to do about it is a personal choice. Here are a few options to decide from:

Ignore the debt

One choice is to ignore the debt. If your debt is past your state’s statute of limitations, the creditor can no longer sue you to recover the debt, though they can still take steps to try and collect it. While creditors may still reach out to collect the debt, it’s against the law for them to mislead, harass or abuse you.

Repay it in full

One other option is to simply repay the debt in full. If you have the financial means to fully repay the debt, this can be an attractive option. The debt will then show on your credit score as completely paid in full, which can help your credit score.

Acknowledge it and set up a payment plan

If you don’t want to ignore the debt and can’t or don’t want to repay it in full, you can acknowledge the debt and set up a payment plan with the creditor. This might include making required monthly payments until the debt is paid in full, or trying to settle your debt for less than the full amount.

What rights are involved with old debt?

Before you choose which route to take, it’s best to know what rights you have when debt collectors reach out to you to collect the expired debt:

The Fair Debt Collection Practices Act (FDCPA) protects you from debt collectors who engage in this unlawful behavior.

The FDCPA gives you the right to verify your debt so you can confirm it’s yours before deciding what steps to take.

The FDCPA requires a collector to send you a written notice containing the name of the original creditor, the amount you owe, a statement saying you have 30 days to dispute the debt and information on how to dispute the debt collection. After receiving the validation letter, you have the right to dispute the debt if the information is incorrect. That way, you can have the negative information removed from your credit report.

You can request in writing that the debt collector refrains from contacting you.

If you encounter a debt collector who violates your rights when attempting to collect time-barred debt, you can take the following actions:

• File a report with your state’s attorney general office.
• File a complaint with the Consumer Financial Protection Bureau.
• Sue the creditor in federal or state court.

The bottom line

The time creditors and debt collectors have to get you to pay up has an expiration date. If you can’t pay up or don’t want to, old debt will eventually fall off your credit report and creditors won’t always be able to sue you to collect debts.

Make sure you understand the statute of limitations on debt in your state, since it’s not the same for everyone. Even if a debt is yours, avoid taking ownership of it until you can prove the debt is yours. If you can afford to pay it, it won’t hurt you. But if you make a partial payment or even acknowledge that the debt is yours, the clock restarts.

Frequently asked questions

Can a debt collector restart the clock on my old debt?

Debt collectors can restart the clock on old debt if you:

• Admit the debt is yours.
• Make a partial payment.
• Agree to make a payment (even if you can’t) or accept a settlement.
• Charge something to the account (if it’s a credit card or another type of revolving account).

Does disputing a debt restart the clock?

Disputing the debt doesn’t restart the clock unless you admit that the debt is yours. You can get a validation letter in an effort to dispute the debt to prove that the debt is either not yours or is time-barred.

Is it better to pay old debt or let it fall off?

Old debt that you haven’t paid off in many years means that at some point it probably went into default. Defaulted debt can crush your credit score and hurt your chances of borrowing money in the future, whether it’s applying for a mortgage, car loan or credit card.

If you have the means to pay off old debt, it will help your overall credit — both your score and your report. Remember that even if debt is time-barred, creditors and debt collectors can still reach out in an effort to collect debts.

Will time-barred debt affect my credit score?

Time-barred debt can have a negative impact on your credit score if it’s still listed on your credit report as past due and you choose not to make a payment. Even if your debt meets the statute of limitation requirements in your state, the credit reporting agencies won’t remove the negative item for seven years.

8 steps to get old debt off your credit report

Bad credit doesn’t have to last forever. If you take steps to improve your financial life, mistakes will disappear from your credit report over time. Chapter 7 bankruptcies will stay on your credit report for 10 years, while unpaid or delinquent accounts will stay only seven.

However, negative debts don’t always disappear on schedule. Misunderstandings or errors can result in a debt overstaying its welcome on your credit report. If old debt is still haunting your credit report, you don’t have to live with it. Here are eight steps to get it off your credit report.

8 ways to remove old debt from your credit report

According to the Federal Reserve Bank of New York, 2.5 percent of outstanding debt is in some degree of delinquency as of September 2021. However, having an accurate and up-to-date credit history without old collections or delinquent accounts is important when you’re applying for loans or other new credit.

If you’ve noticed old debts on your credit report, it’s best to act as soon as possible to remove these items. Here are a few steps you should take.

1. Verify the age

“If it’s not falling off, then the credit reporting companies have not received the right date,” says Maxine Sweet, former vice president of public education for credit bureau Experian.

With a court action (like judgment or bankruptcy), determining the date is easy: You count from the day it was filed.

Delinquency is more difficult. “The regulatory language on it is very complicated,” Sweet says. However, the date that you first became delinquent and after which never caught up is the date that should count, she says.

Her example: You miss a payment in January. Then you make it up and also pay in February. Then you miss March and your bill eventually goes into default. Your delinquency date would be March.

Look back through your own records to verify the payment history for old debts. If your credit report has an error, you can use these documents to dispute the error with the credit agency.

Why this is important: The original date of the debt is what determines when it falls off your credit report.

Who this affects most: This affects anyone with debt, but especially those with delinquencies or missed payments.

2. Confirm the age of sold-off debt

One point that confuses even the experts: No matter how many times a debt is sold (and resold), the date that counts for the seven-year credit report clock is the date of delinquency with the original creditor.

If a collection agency bought your 10-year-old retail card debt and has started putting it on your credit report with a different date, that’s a no-no.

Why this is important: Again, it’s the original date of when the debt was incurred that determines when it falls off your credit report. You want that to be as accurate as possible.

Who this affects most: Those with older debts are more likely to have their debts sold to a collection agency.

3. Get all three of your credit reports

Your three credit reports from consumer reporting agencies Equifax, Experian and TransUnion are not identical.

The old debt in question might be listed in some credit reports but not others. To find out, get a copy of all three of your reports. Federal law entitles you to request a free copy of each report once every 12 months. You can download them for free at AnnualCreditReport.com.

Once you find out which bureaus are listing the debt, contact them. Your credit report will include contact information and dispute instructions. Equifax, Experian and TransUnion will give consumers free weekly credit reports until April 20, 2022.

Why this is important: If you’re only looking at the copy of your credit report from one credit bureau, you may be missing inaccurate information that is on another report.

Who this affects most: Mistakes with credit reports can happen to anyone with old debt on any of your credit reports.

4. Send letters to the credit bureaus

If the debt really is too old to be reported, it’s time to write to the credit bureau(s) to request its removal. When you dispute an old debt, the bureau will open an investigation and ask the creditor reporting it to verify the debt. If it can’t, the debt has to come off your report.

The Fair Credit Reporting Act requires credit bureaus to correct or delete any information that can’t be verified or that is incorrect or incomplete, typically within 30 days. Otherwise, they are in violation and you are within your rights to file a lawsuit, as well as file a complaint with the Consumer Financial Protection Bureau.

Make sure to craft a case so strong that the creditor will have to acknowledge that it’s correct or present tangible evidence to the contrary. Include copies of anything that supports your claim, such as copies of court filings that show the correct date for a judgment or bankruptcy or a letter from your original creditor showing when the account became delinquent.

If a collection agency is reporting an account as a different (and newer) debt, include any paperwork showing that the two accounts are really the same debt.

Send this letter certified with a return receipt requested so that you can prove when it was sent and that it was received.

Why this is important: If you can prove that the debt is older than legally allowed to show on your credit report, the bureau can remove it.

Who this affects most: People with incredibly old debt have a better case for getting their debt removed.

5. Send a letter to the reporting creditor

You also want to send a similar letter to the creditor who’s currently reporting the debt.

To do this, either reframe your credit bureau letter with copies of your documentation to the creditor or simply send a copy of the same letter with copies of any documents included. Avoid making statements that could restart the debt clock if the statute of limitations has not expired.

As with the credit bureau, send the letter certified with a return receipt requested. The creditor has 30 days to investigate your claims and respond.

Why this is important: Depending on who your creditor is, it may be faster to work directly with it to get your old debt off your credit report.

Who this affects most: Those with older debts with more established companies will benefit from contacting the original creditors. You may find it easier to work with larger, more established creditors than with smaller collection agencies.

6. Get special attention

If your initial letters don’t do the trick, you may have to kick your approach up a notch, says Sonya Smith-Valentine, former managing attorney at Valentine Legal Group. Take a few minutes to research the company reporting the debt.

“Direct your next letter to the president’s attention at the company’s headquarters address,” she says, “because you get a different kind of response from the office of the president than you do from customer service.”

Again, send it certified and keep a copy in your files.

Why this is important: It can sometimes be challenging to find the right person or the right department when disputing old debt, so you may have to escalate your request.

Who this affects most: Those who have not been able to get their old debts removed through other means may try more targeted methods.

7. Contact the regulators

If the collector is “in any way, shape or form a bank,” it has a federal regulator, Smith-Valentine says. “They actually take individual complaints and contact the companies about the complaints they receive.”

“I always say that it should not be your first recourse,” she says. Only use this one if “you have contacted the company and received no resolution or response,” she says, as regulators want to see that you’ve tried to solve it yourself first.

Again, opt for snail mail, she says. “You want to be able to send in copies of your correspondence and copies of your return receipts, and you can’t do that online.”

One shortcut you could try is printing out the agency’s complaint form, filling it out and sending it in clipped to your documents.

Why this is important: Financial regulators provide critical oversight and support for consumers trying to set the record straight about their credit reports.

Who this affects most: This should be a last resort, but if you have not been able to get old debts removed by contacting the credit bureaus or the company directly, financial regulators may be able to help.

8. Talk to an attorney

Consulting an attorney doesn’t always mean pursuing a lawsuit. Sometimes all you need is a letter on legal stationery to make a creditor review the records.

If, despite your best efforts, the creditor or collector is keeping old debt on your report, an attorney can also advise you as to whether a lawsuit is a good option.

If you do talk to an attorney, choose one who specializes in consumer rights, Smith-Valentine says. “When you’re dealing with the Fair Credit Reporting Act, it is very convoluted and you need someone who’s done it, who understands it and who knows where the holes are.”

One source for help is the National Association of Consumer Advocates, an organization of lawyers who specialize in credit and debt law.

Why this is important: Even if you don’t file a lawsuit, having a letter sent by a lawyer can help get your case seen by the correct people.

Who this affects most: Anyone who has tried the other options but is still having trouble getting old debt off their credit report should contact an attorney for assistance.

How do you get something removed from your credit report after 7 years?

In theory, debts should be automatically removed from your credit report once they reach their legal expiration (seven or 10 years). If you see debts on your credit report that are older than that, you’ll want to contact both the creditor and the credit bureau by mail requesting a return receipt. In your letter, include all documentation about the debt, including any inaccuracies.

How long can a debt collector pursue an old debt?

Each state has a statute of limitations about how long a debt collector can pursue old debt. For most states, this ranges between four and six years. These statutes govern the amount of time that a debt collector can sue you, but there is no limit to how long a collector has to try and collect on a debt. If you are being contacted about a debt that you believe is not yours or is outside the statute of limitations, do not claim the debt; instead, ask the company to validate that the debt is yours.

Can a collection agency report an old debt as new?

Collection agencies cannot report old debt as new. If a debt is sold or put into collections, that is legally considered a continuation of the original date. It may show up multiple times on your credit report with different open dates, but they must all retain the same delinquency date. They should also all be discharged on the same date — seven years after the original open date.

The bottom line

While old debts should be discharged from your credit report after they’ve reached their legal expiration, this doesn’t always happen automatically. It’s important to be vigilant and aware of the information that is on your credit report. If it has any errors or misinformation, you’ll want to fix that as soon as possible. Removing even a single old collection account or old debt on your credit report can raise your credit score by 50 points or more — so take action as soon as you notice an error.

How to Pay Off Old Debt

Before settling bad debts, consider options for paying them off.

When a debt goes unpaid, your account could be turned over to a collection agency. Debt collectors can use different tactics, including civil lawsuits, to get you to pay.

Old debts can eventually become time-barred, meaning debt collectors can no longer sue you. But negative credit information related to old debts—including those that have landed in collections—can stay on your credit report for up to seven years.

Paying off collection accounts could help to clean up your credit history and potentially add points back to your score. Here are some tips on how to pay off debt in collections and what to know about choosing debt settlement instead.

Key Takeaways

• Figuring out how to pay off debts when they've gone to collections doesn't have to be stressful.
• Options include working out a payment plan with creditors, enrolling in a debt management plan, or negotiating a debt settlement.
• Hiring a debt settlement company can cause severe damage to your credit scores.

Gather Information on Your Debts

The first step in paying off old debts is knowing what you owe and to whom you owe it. So, start by making a list of past-due debts that includes:

• Amount owed
• Creditor name and contact information
• Last payment date

Your credit report can be a good resource for finding this information if you don't have recent statements from creditors or debt collectors. You can get a free copy of your credit report from each of the three credit bureaus through AnnualCreditReport.com.

Note: Check your credit reports for any errors, and dispute any incorrect information you find with the reporting credit bureau.

Again, keep in mind that some of your old debts may be time-barred. This means that the statute of limitations for enforcing collection actions against you has passed. The time frame for this varies from state to state, but it's typically between three and six years from the last date of payment.

If you have a debt that's close to the statute of limitations, paying it off may not make sense since you can no longer be sued for it. But the delinquent debt could still stick around on your credit report for up to seven years. For decisions like this, the FTC recommends speaking with a lawyer.

Note: In some states, making a partial payment or even agreeing to pay an old debt restarts the statute of limitations.

Work Out a Debt Payment Plan

Once you've identified which old accounts you want to pay, the next step is to decide how to pay off debt in collections. You could do this on your own, or you could work out a payment plan with the help of a credit counselor.

On Your Own

Working with your creditor or debt collector on your own is the most direct approach. Essentially, you would contact the creditor or debt collector to discuss payment plan options.

The advantage of doing so is that you may be able to halt any collection actions that are in progress against you, including the threat of a lawsuit. But it's important to have a strategy going in so you don't end up feeling pressured to commit to paying more than you can afford.

So before approaching your creditors, consider:

• How much you owe
• What you can afford to pay each month
• How long you think it will take to pay off old debt

Note: Be aware of your rights. By law, a debt collector has to tell you how much you owe and the name of the original creditor. If you feel that a debt collector is infringing on your rights in any way—i.e. refusing to provide information or harassing you—you can file a complaint with the Federal Trade Commission.

With Assistance

If you're not comfortable dealing with your creditors or debt collectors directly, you may consider getting help through credit counseling services. Credit counselors can review your budget and financial situation to help you choose a realistic strategy for how to pay off debt in collections.

They can also help you create a debt management plan through which you make a single payment to the credit counselor each month. The credit counselor then distributes the payment among your creditors.

This can simplify how to pay off debts when you've fallen behind. But your success depends on your ability to stick with the plan and your creditors' willingness to accept it.

Note: Be wary of any credit counseling service that asks for a large fee upfront or makes promises about paying off your debts that seem too good to be true.

Settle Debt for Less Than You Owe

Debt settlement is an alternative option for paying off debt in collections. With debt settlement, you're asking your creditors to accept less than what's owed and cancel out the remaining debt. You can negotiate a debt settlement on your own or with the help of a debt settlement company.

On Your Own

Negotiating debt settlement on your own starts with listing out your debts to determine:

• How much is owed
• How far behind you are on payments
• What you can afford to offer as a settlement

Your creditors may expect you to offer a lump sum to settle a debt. For example, if you're attempting to negotiate a $5,000 balance down to $3,000, you may need $3,000 in cash to seal the deal. Other creditors may allow you to break up the settlement into several smaller installment payments.

This can help you clear a debt in collections but it doesn't guarantee that negative account information will be removed from your credit report. Under current credit reporting laws, negative information that's accurate can only be removed with the passage of time.

With Assistance

Debt settlement companies or debt relief companies can negotiate settlements for you, typically in exchange for a fee. This can save you the trouble of having to bargain down your creditors.

But it's important to know what you're paying for, as debt settlement companies can't necessarily get you a better deal than you might be able to get on your own.

And just like with credit counseling services, it's important to research any debt settlement company you're considering working with to make sure it's legitimate. Avoid any company that requires an up-front payment or makes guarantees they can settle your debt.

Finally, hiring a debt settlement company may be less than ideal because the companies often ask you to stop making payments on your debt, which further hurts your credit score.

Note: The IRS considers forgiven or canceled debt to be taxable income in most cases, so keep that in mind if you're weighing the benefits of debt settlement.