Legal Question in Credit and Debt Law in Alabama

Re: collections

A charge off is simply the removal of a debt from the accounting of a company. The charge off does not eliminate your obligation to repay the debt. A creditor or third-party collection agency can legally demand or request payment on the debt as long as the debt remains unpaid. Unless the debt is secured by some type of property (e.g. a car), they cannot actually force you to pay without a lawsuit. There is a statute of limitations (SOL) for the creditor to file a lawsuit on the delinquent debt. This period starts when the debt becomes delinquent. In Alabama the general statute of limitations is 6 years on contracts and notes, unless the debt is on a open account. In that case the SOL is 3 years from the date the debt became delinquient. If they file after the SOL, then their failure to meet the SOL is a defense to the lawsuit.

As per the Fair Credit Reporting Act, a charge-off, whether paid or not, can remain on a consumer's credit reports for up to seven years. Maybe that is where you got the idea of a 7 years SOL.