Each state has a different law when it comes to the credit card debt statute of limitations. These range from three to ten years with some states having even longer credit card statute of limitations. These laws are not in place to protect to the credit card company, but the consumer. What this means is that credit card debt collection can not take steps to sue over credit card debt once the statute of limitations has passed.
This does not mean that you do not have to pay off your debt. A debt collection agency can still attempt to collect on the credit card debt. This simply means that when credit card debt collections companies purchase your credit card debt, they can not legally sue you for the debt if the statute of limitations has passed.
Many credit card companies sell old paper, or debts to collection agencies for fractions of a penny on the dollar. They sell a lot of this old debt off at once to at least recoup some of the monies lost from the lack of these debts being paid. The collection agency will then try to collect on the original amount of the debt. When you pay, the collection agency keeps the money to pay for the debt that they purchased.
While debt collection agencies can not harass you or go beyond the bounds of the Fair Debt Collection Practices Act, they are well within their rights to collect on the debt. Consumers still owe the debt whether two months or twenty years have passed. If you borrow money from a family member or friend, you would still owe it no matter how much time has passed. The same holds true with credit card debt.
Many people feel that when the credit card debt statute of limitations has passed that the debt will be wiped off their credit report. This is not true. The debt is still owed, but the collection agencies can not sue. That is the only change the statute brings about. Since many collection agencies buy your debt at a reduced rate, you will be able to settle your account for much less than it is worth through a collection agency.