Yes, but even if the debt isn't on your credit report, and is removed after 7 years, you still will owe it. All the 7 years means is that its not listed on your report and you can't be sued over it. And it will still keep showing up on your credit report when its sold, which is a much bigger (and costlier) issue than filing a one-time chapter 7 bankruptcy (unless you have a ton of assets). Or even chapter 13 (where you still pay your debts in an arranged payment plan), is still a smarter move if you have assets. After bankruptcy you can rebuild your score, but your score won't rebuild if you keep having collections items (re)appear on it from past debt you still owe.
The great thing about bankruptcy is, all the bad things you hear about it are from credit card companies because they don't want you to file. In the end, no one really cares if they see "bankruptcy" on your report. A few select places, but not many. You can still rent a house, get credit cards (usually you'll get offers immediately after discharge because they know you can't file again for awhile), and car loans. Its going to be based more on your credit score than if "bankruptcy" is listed on your report. And if you already have items in collections, your credit score is already bad so the "bankruptcy" doesn't make much of a difference. Hasn't Donald Trump even declared it before like 5 times? Its really not a big deal. Its often the smart financial choice- especially if you have no assets.
No it can't, because you technically still owe it until its either 1.) paid in full, 2.) settled for an agreed upon amount, or 3.) discharged in bankruptcy. The 7 year mark just basically means you can't be sued and it can be removed from your report because its old, but it will continue to be added back by those who keep buying and selling it, for the rest of your life.
I actually just double checked. Yes, what I said is correct. Here's an example:
Q: What happens to an unpaid debt after 7 years?
I've heard if a debt is seven years old that there is no point in paying the collection agency who has the case. Will it improve your credit score to pay it off at this point?
A: You have two different time lines mixed up.
First is the one in the Fair Credit Reporting Act which says that derogatory accounts will show for 7-years from the date of first delinquency.
The second is the statute of limitations which varies from State to State and by what type of debt you are talking about.
This is the legal time that people can sue in court and get a judgment. Once the S.O.L. has passed you can still be sued but all you have to do is show the court that the S.O.L. has expired and the case will be dismissed.
I have posted a link so you can look up your State at the bottom.
There is no time limit on how long people can attempt to get you to pay. Never admit that a debt is yours and never pay a dime on one that is past the S.O.L. because this will restart the S.O.L.
http://www.bcsalliance.com/index.html
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