Statute Barred Debt and Credit File
If you do not pay the debt at all, the law sets a limit on how long a debt collector can chase you. If you do not make any payment to your creditor for six years or acknowledge the debt in writing then the debt becomes ‘statute barred’. This means that your creditors cannot legally pursue the debt through the courts.
After six years, the defaulted debt will be removed from your credit file, even if you haven’t finished paying it off. Some creditors will refuse your application when they see the default on your credit file. Others will give you credit but they’ll charge you a higher rate of interest.
Debt After 6 Years
What happens if I don’t pay my debts for 6 years?
After six years have passed, your debt may be declared statute barred. This means that the debt still exists but a CCJ cannot be issued to retrieve the amount owed and the lender cannot go through the courts to chase you for the debt.
Debt Statute of Limitations
In California, the statute of limitations for consumer debt is four years. After four years have passed, the debt becomes essentially uncollectable.
For unsecured personal loan debt, the statute of limitations is typically between three and six years. Technically, you still owe a debt after the statute of limitations has passed.
Credit Card Debt Statute
In California, most credit card companies and collectors have only four years to sue for unpaid debts. Once that period elapses, the company loses its right to file a lawsuit.