Back when I was younger, I made a lot of bad financial choices. Got evicted after missing three months of rent, lost my car to repossession ($10K owed), maxed out a $5K credit card, and took out way too many payday loans. Never paid a dime, ignored all calls and court stuff. I know it was reckless, but I was 21 and struggling with addiction.
Now I’m 5 years sober, and I see a lot of people stressing about similar situations. So I’m just wondering… where did all that debt go? Did I just get lucky?
If your state has a time limit on debt, it’s basically gone. They can’t report it, sue you, or take your wages. Some collectors might still call and try to get you to pay a small settlement, but you don’t have to give them a cent.
Whatever you do, don’t admit the debt was yours or agree to pay any amount, even a dollar. That could reset the time limit and make it active again.
Negative marks drop off your credit report after about 7 years. The debt still exists technically, but it won’t show up on your report. If the time limit in your state has passed, they can’t sue either.
Since it was a lot of money, it’s worth checking court records to make sure you weren’t already sued without knowing it.
Avery said: @Reagan
What if they already sued? Would a judgment last forever? Can they still garnish wages?
If they sued and you didn’t show up, they probably got a default judgment. These can last 10 years and sometimes get renewed for another 10. Wage garnishment depends on the state.
Appreciate all the responses! I’m in CA, so I’ll check if there are any lawsuits in the system. Nothing is showing on my credit reports.
I’ve also been saving money, planning to pay off some of the debt, but when I checked… it’s just gone. I’m behind in life (34 now), but at least I’m not drowning anymore.
Hell yeah, they got nothing on you now. Hope you’re doing well and making better money moves.
Technically, the debt still exists, but if the time limit ran out, they can’t sue you anymore. If you pay even a dollar, you reset that clock. After 7 years, it disappears from your credit file, but some lenders can still see it if they dig deep.
But honestly… money isn’t even real. The whole system is fake anyway.
Rin said:
If a debt gets charged off, does the IRS count it as income? Don’t they send you a tax form for that?
If they cancel the debt, they can send a 1099-C, but not always. It depends on the situation. Some settlements count as taxable, some don’t. It’s better to assume you might owe and be prepared.
