Whether you carry a large amount of debt on your credit cards or pay them off each month, it may surprise you to find out that there is a statute of limitations on paying back that debt.
Usually when statute of limitations is spoken about, it's being referred to in criminal terms. State governments have a certain amount of time to bring charges against a person for a criminal act. The statute of limitations on credit card debt is very similar. Credit companies have a certain amount of time to successfully obtain a judgment against you. If they don't get the judgment, you no longer legally owe the money. The Federal Trade Commission refers to credit card debt as Time-barred Debts.
The amount of time that the credit companies have to obtain a judgment depends entirely on what state you live in. The time varies from three years to over ten years. Once that time is up, the credit company cannot even legally threaten to sue you. Just because they can't take you to court does not mean they have to stop trying to collect, they may still call or send bills in the mail. Many times when the statute of limitations is nearly up, the financial company will make a last push to collect the monies owed. Any acknowledgment of the debt, like a small payment, can reset the time limit to collect in court back to the beginning.
Just because there is a limited time that companies have to collect from you, does not mean a failure to pay won't adversely affect your credit rating. Every month your financial obligation is reported to the credit reporting agencies as unpaid, your credit rating takes a hit. In fact, even after the time to collect in court is expired, those reported non-payments can stay on your credit report for seven years.
To find out how long the statute of limitations is where you live, contact your State Attorney General's Office.