Defaulting on Credit Cards

I have been told that if you ignore your credit card debt for 7 years the stautute of limitations is reached and any negative mark on your credit in reference is illegal. True or false? What are the ramifications of ignoring credit card bills, say $3500, for 7 years? If you can hold out without credit for 7 years are you in the clear?

DaLovin’ Dj

It’s a state by state thing. In North Carolina if you don’t pay on it or they don’t persue any action for four years then it’s run out. However it can and does stay on your credit report. It’s called a write off.

Eventually, if enough time passes with NO MORE bad credit then your credit record will be clear. I used to think it was 7 years as well but going for a loan they busted my chops about something that had happened 8.5 years prior. I complained saying I thought 7 years was the limit and the loan officer said it was more like ten. I got the loan anyway for a decent rate so I didn’t pursue that any further. Maybe I could have gotten it wiped off.

That said your credit record has nothing to do with getting taken to court and being forced to pay your debt. IIRC new rules make it such that even bankruptcy won’t clear your credit card debt. Chances are someone os going to come looking for that money so it may haunt you longer than you think.

Yes, charged off credit cards will be removed from your credit record 7 years from the last debit activity on the card. Bear in mind, though, that with a bad credit rating you most likely will not be able to:
-rent an apartment
-open a bank account
-get a loan from any reputable business. Those which will lend to you will charge exorbitant interest rates.
-get a phone (cell or land line) without a paying a major cash deposit. The same is true with most other utilities like electric, gas, water, etc.
-write a check on any existing bank account you may have
-a myriad of other day-to-day items that you may have never imagined depended on your credit rating.

So if 7 years of paying cash and/or buying money orders while you live with your parents sounds good to you, you’re in the clear.

That’s assuming they don’t get a judgment against you (or the collection agency does). Once it is a judgement a few additional things happen:
1 interest is legally enforceable
2 the clock restarts on the statute of limitations and can be renewed.
3 Ho! Opal
4 Your wages/tax return can be attached
5 your items (cars, TV whatever) can be taken. - Items are NOT limited to the items that are charged.
6 the sherrif can come a knocking toi take the items.

So how does one go about finding out if it’s been cleared once the seven years have past? If it’s not cleared by when it’s supposed to, where do you go to get it cleared? Forms, websites, anything??? I used google, but I get so many obvious garbage rip-off offers, that I am skeptical of what to believe here.

DaLovin’ Dj

Go to the web site of each of the three major credit bureaus: Equifax, TransUnion and, uhm, Friday afternoon brain cramp has taken the third from my memory. The site will tell you how you can get a copy of your report and how to correct any invalid information therein.

Not for credit card debt. CC’s are unsecured, that is you pledge no collateral for the loan. No collateral means the CC companies cannot take your possesions to satisfy the debt. A judgement stays on your credit report for 10 years, IIRC.

  1. Sort of. Judgments do bear interest. (In Illinois, 9%), but this is actually less than what you would have been paying on your credit card prejudgment.

  2. No. The statute of limitations doesn’t “restart”. Once suit is filed (within the statutory limitations period), the limitations period is irrelevant. (Judgments do eventually expire, but can be renewed, at least in Illinois, so that they don’t truly expire for 20 years.)

  3. Yes. (Hi, Opal)

  4. Yes/No. Wages can be garnished, within strict limits. For most judgments, attaching a federal tax refund is not something reasonably available to a judgment creditor.

  5. True. The later post disputing this is wrong. Once a debt, even an unsecured one, is reduced to judgment, most of your property can be attached, or as k2dave said, seized by the Sheriff and sold to satisfy the judgement. Some property is exempt from attachment, and this varies from state to state.

  6. See #5.

Q? Would not the monthly interest charges constitute activity on the account? So that even if you are not paying on the account, activity continues? This could mean that essentially the 7 year limit never really starts and that theoretically the CC company could pursue you for the rest of your life?

That would be Experian

On a related note, I went to the Equifax site because I wanted to repair a few mistakes on my credit report. I got it done with no problem. I next went to Experian. I put in the required information and their web site told me that I had to go to my “local” office in Chicago to repair anything that was wrong. Local. Hmm. I live in Oregon. I would be interested in knowing how they figure it is “local”.