Do unpaid debts disappear? FAQ and answers

Question: Do unpaid debts expire or will I owe them until my death?

Answer: Do unpaid debts go away? Will they expire after some time? Your old debt will follow you forever because you owe that money to someone. The default account will stay on your credit report. However, according to the Fair Credit Reporting Act, unpaid debts will stay on a debtor’s credit report for 7 years from the date of delinquency.


However, based on the federal or state’s Statute of Limitations (SOL), the creditor or the debt collection agency (Companies who buy a defaulted account to collect money) can force the debtor to get the money back for 7 years.


However, the period varies from state to state; in some states, the creditor or debt collectors are liable to collect a debt from the debtor only within 3-6 years.


Unfortunately, the statute of limitations doesn’t wipe out the debt that you owe. It is because your default account can be sold to collection agencies multiple times and they can knock you out by calling or sending a letter to collect the money at any time. And if you acknowledge the debt, the debt collector can sue you for the money.

Question: How do unpaid debts affect my credit score?

Answer: If you don’t pay off your credit card bills, the creditors can sell your account to the debt collection agencies after 180 days of non-payment. If this happens, your credit health gets hurt.


Once you don’t pay off the debt on time, your delinquent account will be reported to the 3 major credit reporting bureaus.


As I said earlier, the delinquent account will stay on your credit report for 7 years and affect your credit score negatively. As I said earlier, the delinquent account will stay on your credit report for 7 years and affect your credit score negatively.

Question: What is a time-barred debt?

Answer: In short, a debt that expires the statute of limitations. A debt that is too old for debt collectors to sue you for the money. As per the state SOL, debt collectors can sue a debtor for a certain period, usually 3-6 years and longer (7 years).

Question: What happens if the debt collector knocks me for a time-barred debt?

Answer: The Fair Debt Collection Practices Act (FDCPA) prohibits debt collectors or creditors to sue the debtor for time-barred debt. However, debt collectors can call you for an old debt that has expired.


If that happens, you should defend the lawsuit in court by providing proof that the debt has expired SOL.

Question: What should I do if a collection agency contacts me for an expired debt?

Answer: Creditors or collectors can still contact debtors even for time-barred debt. If the credit reporting time limit hasn’t expired, it will show on your credit report and your wages can be garnished as well.


Thus, you shouldn’t ignore a debt collector’s call, no matter how old the debt is. However, before doing anything, you should verify the actuality of your debt. To do so, you have to ask the debt collector to validate your debt in writing.


You can also send a debt validation letter to the debt collector within 30 days of the collector’s first call with you. If the debt collector fails to validate the debt, then you are not liable to pay the debt. The debt collector has no legal right to collect it from you.

Question: Can I go to jail for unpaid debts?

Answer: Some debt collectors give threatening calls to the debtors by saying that they can be sent to jail to get the money back. If it happens, then you should make a complaint against the debt collector or the collection agency to your State’s Attorney General.


As per the FDCPA, debt collectors have no right to threaten or use abusive language towards a debtor for the collection of unpaid debt. Well, no one has the right to send you to jail for a debt. Creditors or debt collectors can’t send police to arrest you for a debt. However, if you default on tax payments and child support, then it will be granted as a federal crime.

Question: When does the statute of limitations clock start?

Answer: The date when you made the payment for the last time or acknowledged the debt.

Question: Does the SOL start after it’s expiration?

Answer: The credit reporting time limit is usually 7 years in most states, but the SOL varies from state to state.


Thus, you should check your SOL before making payments on a debt. Sometimes, the debt collector contacts a debtor for an old debt that has expired the debtor agrees that the debt belongs to his/her, then the SOL clock will start again.


Debt collectors often use this trick to frighten a debtor. Once the debtor acknowledges the debt, the SOL starts ticking again and the debt collector gets the right to sue the debtor.


Thus, you shouldn’t acknowledge a debt over the phone. Ask the debt collector to validate the debt. Tell them that you can’t recognize or you don’t think the debt belongs to you.

Question: When are unpaid debts cleared?

Answer: Unpaid debts are cleared in 2 circumstances.

  1. Once you pay the full amount to your creditors.
  2. When you settle or consolidate your debts.
  3. If your unpaid debt is no longer listed on your credit report. But in this case, you still owe the money.

Question: When are unpaid debts written off?

Answer: Debts are written off when creditors don’t count the money you owe them in their financial statements. They count it as a financial loss. Creditors are required to write off bad debts to avoid misleading investors.


If you haven’t paid a penny to creditors in the last 6 months, then they can write off your unpaid debts. Don’t think that your unpaid debts have been forgiven or forgotten. You still owe money and the written-off debt will be listed on your credit report. This will hurt your credit score.

Question: How long do unpaid debts last?

Answer: Unfortunately, unpaid debts last as long as you live. They don’t expire. They just become ‘statute barred’. Usually, unpaid debts, judgments, and charged-off accounts drop from your credit report after 7 years. The statute of limitations (SOL) period also lasts for a certain time period. But what happens to debt after the SOL period is over? What happens after the listing drops from your credit report?




Your creditor can call and ask you to pay the money. But he can’t recover it through the courts. However, if you acknowledge the debt verbally or in writing after the SOL period has expired, then your creditor can take steps to recover the money legally.

Question: How to find unpaid debts

Answer: There are 2 ways to find unpaid debts. Let’s find out how.

  1. Glance through your credit report: Check your credit report to get a piece of detailed information about your unpaid debts. You can find out the name of the creditors, collection agencies, and the balance on the account. You can also view the contact details of your creditors from your credit report. You can get a free copy of your credit report at Take advantage of this opportunity every year.
  2. Knock the door of your creditors: If you have an unpaid debt but don’t know whom you owe money, then in that case you can contact your original creditor. He can give you an idea about if your debt has been sold or assigned to a debt collection agency.

Question: What happens to old unpaid debts?

Answer: Various things happen to unpaid debts. Initially, unpaid debts were assigned to the in-house collection agency. They are trying to recover payments from debtors. If they fail to get money, then those unpaid debts are assigned to third-party collection agencies. They try to collect money from debtors and get a hefty commission on the total amount collected. Sometimes, unpaid debts are also sold to junk debt buyers for pennies on the dollar.


Unpaid debts are also reported to credit bureaus within a month. They stay on the credit report for 7 years and 180 days.

Question: What happens to unpaid debts when you die?

Answer: Your debt belongs to you. No one else is responsible for it. Your debt can’t be passed on to your surviving family members. Your family member is responsible for the debt only when he/she is a co-signer on a loan. In another instance, your spouse can be held responsible for the loan after your death in a community property state.


After your death, your estate is settled first. Any remaining debt is paid off from the value of your estate. If the value of your estate is not sufficient to cover your unpaid debts, then your creditors will be paid out at equal percentages until the estate money is finished. The rest of the debts will be forgiven.