Having bad debt on your record can cause quite a few problems. The longer the debt sits there and remains delinquent, the tougher it will be to improve your credit.
Actually, it will make it tougher and tougher to get any kind of new credit. If you have bad debt, how long does it take before you are no longer liable for legal action?
Any debt on your record is legally able to remain for a period of six years. However, there are some tricks to the trade that credit companies will use in order to keep it on the report longer.
In order to avoid this from happening, you are going to have to be just as savvy as the creditors.
A bad credit mark will appear on your report once the account has gone into delinquency. If you do not make payment arrangements, file for bankruptcy, or file some other legal action, such as DRO, this debt will remain delinquent for up to six years as long as no other action has been taken.
Now, this is where it can get a bit tricky.
If the creditor contacts you at a later date, long after you have decided to not pay the debt and allow it to become delinquent, the date can be refreshed.
For example, you have a debt that has been sitting on your report for five years. There has been no contact and you have merely twelve months to go before it is permanently off your record.
If the creditor contacts you regarding the debt and you acknowledge that debt, they can refresh it on your report.
So what are you to do in this scenario? If contacted, simply decline any knowledge of the debt. Do not agree to it in any form or agree to look into it.
Tell them you have no idea what the are speaking of and end the conversation.
When the six-year anniversary of the debt arrives, immediately contact your credit reporting agencies and have the debt removed from your credit report.
