I Have an Old Credit Card Bill That I Haven’t Paid on in Ten Years: What Are My Options?

If you have an old unpaid credit card account that has come back to haunt you, you are not alone. Many people respond to credit card offers and obtain credit cards when they are young and don’t have a steady income. In many cases, those accounts go into default and you don’t hear from the creditor for several years. Then, all of a sudden, you see the debt on your credit report or you receive a collections letter. What are your options at this point?

  • Your debt might be past the statute of limitations, and therefore uncollectible. A statute of limitations is a deadline to file a lawsuit that differs according to state law and the type of lawsuit at issue. The statute of limitations typically starts to run when you first become delinquent in paying the debt. In the state of California, most debts are subject to a four-year statute of limitations. As a result, in most cases, if your debt is ten years old or more, the creditor cannot collect it from you.
  1. There are plenty of exceptions to the statute of limitations. For instance, if you made a partial payment on the debt at some point, it extends the statute of limitations, even if the debt is ten years old or more.
  2. Creditors often will still try to collect the old debt from you, even if it is barred by the statute of limitations.
  3. If you have been sued for the debt and the creditor has a monetary judgment against you, then the creditor may have longer to collect the debt. After ten years have expired since the date that the court issued the judgment, the judgment automatically expires. However, the creditor can ask the court to renew the judgment BEFORE it expires, and then can renew the judgment every ten years. If the creditor doesn’t renew the judgment, however, the judgment expires and you don’t have to pay it.
  • You can notify the creditor in writing to stop contacting you. The Fair Debt Collection Practices Act bars creditors from contacting you once you tell them to stop. However, they still can sue you for the debt and contact you about the fact that they have sued you.
  • You can try to settle the debt. Sometimes you may be able to negotiate with the creditor or the collection agency to pay a lump sum to settle the debt. You likely would end up paying less than you owe, taking late charges and other fees into account. However, you do run the risk of restarting the statute of limitations if it has not run out, which can lead to the creditor filing a lawsuit against you.
  • You can file for bankruptcy. Whether filing for bankruptcy is a good option for you depends on various factors, including how much you owe in debts, how much income you currently have, and what kind of assets you own.
  1. If you are eligible for a Chapter 7 bankruptcy, you could wipe out all eligible debts, but you also may have liquidate some of your property.
  2. You also might be eligible for a Chapter 13 bankruptcy, in which you make payments on your debts over time.
  3. Filing for bankruptcy temporarily stops the creditor from trying to collect the debt from you.
  • Finally, you can simply pay the debt if you able to pay it. Keep in mind, however, that you likely will owe much more on the debt than you did ten years ago. Depending on the situation, you could owe thousands more in late fees and interest than you did to begin with.

You also should keep in mind that the debt likely will be reported to one of the three major credit bureaus, which can affect your credit rating and ability to borrow money. However, a debt must drop off your credit report after seven and one-half years. You can get a free copy of your credit report from each credit bureau every 12 months by visiting annualcreditreport.com.

Talk to LBE Law Firm About Your Alternatives

LBE Law Firm offers personalized legal representation for individuals in a wide range of legal matters, including collections defense and bankruptcy filings. As part of our evaluation, our office will conduct a detailed review of potential consumer protection and/or Fair Debt Collection Practices Act violations. We will help you understand your rights and ensure that creditors do not violate those rights. LBE Law Firm also handles other legal matters, including immigration law, family law, contracts, and wills and estates. You can reach us at 1-424-LBE-LAW4 (1-424-523-5294) (call, text, or WhatsApp) or via email at info@lbelawfirm.com.Please consult with us today to learn more about how we can help you with your case.

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