Debt with more than 5 years can still be charged?

5 years of life

Have you ever heard the expression "my debt has expired?" This means that it's been five years since the debt was incurred. Many believe these debts are uncollectible, but the truth is that even after this period, the debt can still be collected.

Contrary to what many people believe, debt doesn't disappear after five years. In some cases, it may still be collectible even after this period. That's why it's so important to avoid default and, if it does occur, resolve the situation quickly with an agreement.

How can I still have debt that is more than 5 years old?

The first observation to be made is that debt does not disappear when it “expires”.

Consider that you've taken out a loan with a bank. In this relationship, the bank has the obligation to provide the requested funds, and you must repay as agreed in the contract.

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The obligation to pay is the debt. If one of the installments isn't paid, you're in default. In this case, until payment is made, your role within the relationship with the bank hasn't been fully fulfilled.

In other words, a debt that is more than 5 years old and is not paid off continues to exist in the contract.

What is a lapsed debt?

An expired debt is one that has exceeded the five-year term and, therefore, can no longer generate a negative credit rating. If the debt was incurred more than five years ago and has not been paid, you cannot continue to have a bad credit rating because of it.

It's important to understand the difference between "expiration" and "prescription." Prescription is the period after which, even if the debt still exists, it can no longer be collected through the courts. In other words, after the prescription, the creditor can no longer file a collection lawsuit against the debtor.

It's important to remember that statute of limitations is a legal concept. Therefore, it involves a series of rules and exceptions. One important fact is that not all types of debts have the same statute of limitations. That is, some debts expire in five years, but they can expire in different periods.

However, even if the debt has simply expired or has also expired, informal collections can still occur. This means you may still receive calls, letters, and other forms of communication requesting payment.

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As mentioned above, once a debt expires, the debtor can no longer be negatively impacted because of it. This means their name cannot be registered in credit protection registries.

This means that if you were already on the negative list, your credit will be cleared when the debt expires. And if you weren't already on the negative list, you can't be on the negative list because of this debt either.

5 years of life

Only the company with which the debtor is in default will know about this pending issue.

Another important factor is that debts over 5 years old no longer affect your score. Therefore, if you apply for credit, this delinquency won't negatively impact your credit approval.

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Is it better to wait for the debt to expire to get rid of a bad credit history?

After reading the previous section, you might be under the impression that it's a good idea to have an expired debt, since it can't lead to a negative credit rating. Waiting for your debt to expire isn't actually a good decision for your financial life and could cost you five years of your life.

First, as you've already seen, expiration and prescription are not the same thing. Even if the debt is expired, it can trigger legal collection proceedings. This causes a lot of headaches and additional expenses.

And while the debt remains unpaid, it continues to accrue daily with fines and interest. Therefore, you'll continue to face ever-increasing debt collection.

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Do bank or credit card debts expire?

Just like any other type of debt, those incurred with banks and credit cards also expire. However, you should pay special attention to them.

After five years, you can no longer remain in debt due to these debts. However, it will still be very difficult to obtain services from financial institutions while you are in default, even if your credit score is not bad.

This can cause problems if you need a loan, financing, or a new card, for example.

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5 years of life