How Long Can You Be Liable for a Debt?

Liability for a debt does not last forever.

The Type of Debt Matters.

Each state has a statute of limitations that gives a creditor or debt collector a finite amount of time to collect on any unpaid debt. This will range from four to 10 years and is binding on the lender for the state where the borrower resides.

Credit Liability Can Hurt Record.

Negative items on a credit report will remain on a credit report for seven years on average and 10 years for major items such as judgments or foreclosures. This is irrespective of the statute of limitations and can hinder the consumer's ability to obtain new credit.

Bottom Line

Not all debts are created equal. For example, unpaid IRS debt carries a significance amount more weight than credit card debt. Check laws for the state in reference to the statute of limitations for more information.

References

• Fair Debt Collection: Statute of Limitations