Some credit-card debts are removed from consumers' credit files after seven years. However, that doesn't mean the debt itself goes away. Unpaid credit-card balances are still collectible even after they have been removed from consumer credit reports. As a result, some debts people have forgotten can turn up for collection at a debt-collection company.
Credit-card debt is not truly erased unless it's paid off or discharged in a bankruptcy. Credit-card companies also may forgive debt by allowing cardholders to pay less than they owe to settle delinquent accounts. Cardholders may believe they're free of a debt that's been forgiven by a creditor, but balances that aren't paid in full might reappear years after a credit-card account has been settled.
Debt buyers purchase delinquent debts from credit-card companies to try to collect the amounts owed on past-due accounts. Delinquent debts are turned over to the buyers without regard for how old they are or whether any of the debts were forgiven by creditors. As a result, a debt collector could contact you to recoup the remaining balance on a credit-card debt that you thought you settled with your creditor. In such cases, you should consult with an attorney before dealing with the collection company.
Delinquent credit-card accounts eventually are removed from credit reports. The U.S. Fair Credit Reporting Act requires credit bureaus to remove closed accounts that were sent to collection agencies from consumers' credit files after seven years. Closed credit-card accounts that show no late payments or other negative information remain in credit files for 10 years or longer. Nonetheless, delinquent accounts that haven't been paid off may still be sought for collection by debt buyers even if the accounts have been removed from consumers' credit files.
Old debts that have been removed from credit files might reappear if you decide to pay them. For example, you may decide to pay off an old credit-card debt you thought was settled just to get a debt collector off your back. However, you essentially reactivate the account if you make a payment on it. Therefore, the old debt may reappear in your credit file. Late payments made on a reactivated credit-card debit also might appear in your credit file if you reach an agreement with a collector to pay off the debt in installments and miss a payment.