How long does an unpaid debt have to go before it is written off?

Answer 1

It varies from business to business... if you want to take the "easy" way out, you can let it go to collections and send a "drop dead letter" to them (a sample from Clark Howard is included below), but it will still end up on your credit report. The problem if it goes to collection, though, is that it doesn't show up starting at your last payment and may be years later before the clock starts ticking... at that point, it will remain on your credit report for 7 years but the debt will never really go away. Granted, not all companies sell their bad debt lists, but for tax purposes, it's usually considered to be about a year from last payment before they write off a bad debt. What's best is to try to work out a payment plan with the creditor or even "settle" for a partial payment. (It's better to have something than nothing.) Here's that example "drop dead letter":

(Date)

To Whom it may concern:

I have been contacted by your company about a debt you allege I owe. I am instructing you not to contact me further in connection with this debt. Under the Fair Debt Collection Practices Act, a federal law, you may not contact me further once I have notified you not to do so.

Sincerely,

(Name)

(Account No.)

Answer 2

Banks and credit card companies write off unpaid debt all the time. However, there is no set time that they're going to decide that a particular bill is uncollectible.

If you owe them $50.00, they're probably not going to spend a lot of time and effort chasing you all over the country to collect it. However, if you owe them $50,000.00, there's a good chance they'll chase you forever.

The statute of limitations varies by state as to how long they can actually collect it from you. You'll have to check your state. The statute of limitations starts running from the date of the last activity on the account.

Click the link below to find out the statute of limitations in your state.

Then all this stuff will stay on your credit report for 7 years so I guess the question is, is all of this worth it? Maybe you should just pay the bill.

Answer 3

Most business will wrie off an unpaid debt within a year if it is really doubtful just to save ontaxes etc. However just because it is written off doesn't mean that they haven't passed it over to someone else to collect who will hound you until you pay it off or disappear from the face of the earth. Remember debt collectors only get paid if they collect.

Answer 4

Im not too sure but i dont think it gets written off but it just goes to a credit agency and they chase you from there and if they cant get into contact with you then you get a bad credit rating so if you go and apply for an item on credit Eg a Tv then it will affect your credit rating if you want to buy something and wont be cleared until you pay it. But i think it stays on there for a bit.

Answer 5

usually a year

Answer 6

Never...