What Happens to Unpaid Credit Card Debt After 7 Years? (2024)

Unpaid credit card debt will drop off an individual’s credit report after 7 years, meaning late payments associated with the unpaid debt will no longer affect the person’s credit score. Unpaid credit card debt is not forgiven after 7 years, however. You could still be sued for unpaid credit card debt after 7 years, and you may or may not be able to use the age of the debt as a winning defense, depending on the state’s statute of limitations. In most states, it’s between 3 and 10 years. After that, a creditor can still sue, but the case will be thrown out if you indicate that the debt is time-barred.

Here’s what happens to unpaid credit card debt after 7 years.

• Possible lawsuit: As long as the statute of limitations period is open, a company has the right to sue you for unpaid debt, and you won’t be able to use the age of the debt as a valid defense. If the debt collector wins the lawsuit, that judgment will stay on your credit report for 7 years after it’s filed. After the lawsuit, debt can be collected through wage garnishment and through the (mandated) sale of your assets. And depending on the state, interest will continue to accrue until the debt is paid. It is also technically possible to receive jailtime as a punishment for failure to pay your debt. While you cannot be sent to jail for not paying civil debt (including credit card debt), you can receive jailtime for failure to pay a civil fine assessed when your creditor takes you to court.
• Negative reflection on credit report: If you are 30+ days late on a credit card payment, the late payment will be reported to the credit bureaus and stay on your credit report for 7 years. Similarly, if you are 120+ days late making payments, the lender will write the debt off its books. This is called a “charge-off” and the credit card account will then be reported as “Not Paid as Agreed.” Charge-offs will stay on your credit report for 7 years as well.
• Credit score damage lessens with time: When late payments and charge-offs appear on your credit report, they have a negative impact on your credit score. Just how badly they affect your credit score depends on your overall credit health. It’s possible for one late payment to cause your score to drop by as much as 80 – 100 points. Once a charge-off is reflected on your credit report, you can expect your score to drop by as much as 110 points; the majority of this drop comes from the late payments.

You aren’t off the hook for unpaid credit card debt after 7 years. If you are still within your state’s statute of limitations, you may want to work with debt collectors to settle the debt rather than risk being sued. You do run the risk of resetting the clock on statute of limitations if you do so, so you should consider your options carefully. If you choose to contact your creditor, you may be able to pay less than what you owe or work out a payment plan. However, if the debt collector wins a lawsuit against you, it could result in wage garnishment or the forced sale of your assets. You can read some tips in our guide on How to Pay Off Credit Card Debt.