How long does debt stay on a credit report?

I am helping my best friend clear up her finances and she has many, many old collection notices on her credit report that are helping to drag her rating down. They are probably 4-7 years old. Do these ever fall off? Or get written off? It seems like they just keep transferring them to other agencies. She also has a Household Bank credit card in collections - should this be paid first or the old debt? She tried to make arrangements with the collection agency for Household but they wanted much more a month than she could give them, and they refused to make arrangements so right now they are getting nothing. Help - I am not sure where to start. :(

Negative Items remain on your credit report for 7 years from the date of the negative item. So if the account was "charged-off" it will remain on the report for 7 years from the date of the last delinquency(missed payment). It does not mean the debt goes away, it just means that the creditors can no longer report it to the credit reporting agencies(TransUnion, experian, Equifax).

Creditors, and collection agencies, can not re-age a debt. So it does not matter how many times they transfer it, the date that matters is the original delinquency date. If she has debts that are more than 7 years she needs to send a dispute to the CRA's to have it removed.

Now there is another item called the legal Statute of Limitations. This is a point after which they can no longer force you to pay by filing a suit against you. This is usually 3-6 years depending on the state you live in. So if she has them in the 4-7 year range there is a good chance they are outside of the SOL and can not take any legal actions. The link below gives you a break-down by state.

If she does want to pay them off, only communicate through the mail, NEVER negociate over the phone. Have her send her offer with what she can pay each month. Also, include that once she pays it off that they remove the collection account. DO NOT send any money to them until they have an agreement in writting from them that they approve.

6 years til the debt clears xx

A couple of things you need to think about.

First the statute of limitations on credit card debt in most States is between 3-6 years. Anytime this time has passed there is nothing that the creditors can do to your friend.

Second after 7-years all of these accounts will drop off of her credit report. If she contacts them or makes any type of payment the time starts over again.

So, if the S.O.L. has passed, she should simply wait until the accounts drop off be their selves.

seven just like the move seven year itch

If you do not know what you are doing perhaps you should not be attempting to help. Your "HELP" could cause serious problems if you make a mistake out of ignorance.

Payments or offer of payment does NOT reage items on your credit report. It will however restart the clock on the statue of limitations.

Many collection agencies are suing for smaller sums and older debts. If you don't show up in court, they will get a default judgment even if the debt is beyond the statue of limitations (SOL).

Also, charge accounts are normally considered "open" accounts and have shorter SOL but collection agencies have been successful in convincing judges that credit card accounts are written contracts which have much longer SOL.

Your friend should make sure all her current bills are brought up to date and paid on time. Then work on settling the bad debt one account at a time, working back newest to oldest.

Most debt will fall off in 7 years ... Bankruptcies generally fall off in 10 ... There are statute of limitations that restrict the timeframe in which the creditor can legally sue for non-payment of the debt ... You might want to check the SOL for the state where you live to see what they are in your area.

Here are some really good forums that you and your friend might want to check out ~ CreditBoards.com & Creditnet Credit Forum. Both of these groups are laypeople just like us who are either working through repairing their credit or have successfully repaired their own credit. Lots of really good information on both sites ....

Depending on your state laws it could be between 5-7 years, then companies cannot report that debt to the Credit Bureau's. For example, in my state it is 7 years before the debt falls off and cannot reappear on the report.

How long ago did she try to make arrangements with the collection agency? Because this is when it gets dicey. No contact at all is better than contact. Unless she truly plans on paying the money back then DO NOT CONTACT. They can then start a new cycle making the debt practically new just because of the attempted negotiations.

If I were her, I would ride it out if like you said it is debt that has been default for 4-7 years. Towards the end of statute of limitations the collection agencies will file motions in court to sue. But those are just scare tactics. Unless she has stuff that can be seized for payment then don't sweat it. Paying at this point will probably hurt her credit even more unless she makes a deal in writing that all the negative reports are erased.

they fall off 7 years from the first deliquecy. You could also try disputing them with credit bureau. Since they are so old the creditor may not even bother to respond and they will be deleted.