Does Debt Expire?

Yes, some consumer debts effectively expire. After 7 years, most debts stop appearing on your credit report, and creditors can lose their right to collect via the courts. This is because of the statute of limitations.

The Statute of Limitations on Debt in Georgia

Each state has its own statute of limitations on debt, and in Georgia, the statute of limitations is 4 years for most kinds of debt and 6 to 7 years for others. Certain kinds of debts, like student loans, do not adhere to these deadlines.

To break it down, debts established by oral contracts, promissory notes, and open-ended accounts (including credit card debt, auto loans, and medical debt) have a statute of limitations of 4 years; mortgage debts have a statute of limitation of 6 years, and state tax debt has a statute of limitations of 7 years.

Debts do not go away when the statute of limitations expires. Rather, creditors no longer have the right to sue you for the debt. If a creditor tries to garnish your wages or freeze your accounts, you can simply cite the statute of limitations and ask the court to throw out the request.

If a creditor files a lawsuit against you before the statute of limitations expires, they can get a judgement to help them collect the debt.

How Long Is a Judgement Good For?

Like tax debts, monetary judgements only last for 7 years in Georgia. Even with a judgment, creditors must take steps to collect the money owed by debtors.

Nevertheless, creditors can keep their judgements enforceable by renewing them.

For more information about judgements, read our blog, “Renewing Judgements In Georgia.”

Fair Debt Collection

Debtors have rights under the Fair Debt Collection Practices Act. For instance, debt collectors cannot call you before 8 a.m. or after 9 p.m., nor harass you in any way.

In some states, debt collectors cannot contact you after the statute of limitations has expired.

Tips for Old Debts

As debts get older, many creditors sell them to debt collection agencies, and collectors can make mistakes. If you get a call about an old debt, do not claim responsibility for the debt, as claiming the debt may cause the statute of limitations to reset.

Further, the debt may not even be yours. Collectors often call people with similar names or old telephone numbers by mistake, and debt collection scams could end with you paying a fake debt collector money you do not owe.

Instead of acknowledging an old debt, tell the debt collector that you will not discuss it until you receive a written validation notice. This notice will include information about your rights, including the right to dispute the debt or send a “cease communication” letter.

If you send a cease communication letter, the debt collector must stop contacting you unless they are informing you of a lawsuit or another action against you.

Should you get served with a lawsuit, always appear in court – even if the statute of limitations for your debt has expired. If you fail to appear in court, the judge may rule against you by default.

Need Help Dealing with Debt?

No matter your situation, Busch, Reed, Jones & Leeper, P.C. can help you deal with your debt. Unfortunately, debt never goes away even if it does effectively “expire.”

If you owe too much money, we can help you reorganize your debts or file for bankruptcy, and if your construction business depends on an outstanding loan, we can help you with timely commercial collections.

Our firm has more than 150 years of combined experience handling a wide variety of cases, and we know how to protect your future.

If you need help dealing with debt, please do not hesitate to call us at (770) 629-0154 or contact us online for a consultation.