Talking about debt can be awkward or embarrassing, leaving you to worry in silence about your own rising balances or a family member’s finances.
Here are answers to some questions you might hesitate to ask.
Will my debt ever get so old that I won’t have to pay it?
Not really. Many debts that might be worrying you — credit card balances or medical bills — have a statute of limitations. It varies by state, but generally is three to six years from the first missed payment or most recent payment. Most negative marks fall off credit reports after seven years.
But you still owe the debt. And debt collectors can seek payment, even though they can’t sue you.
Tip: There are a few ways to handle old debt, but tread carefully or you may accidentally reset the statute of limitations, which leaves you open to a lawsuit.
Will I get stuck with family members’ debt after they die — or vice versa?
It depends on the debt and how connected family members’ finances are.
Assets left behind after death may have to go toward paying off debt. Most times, any debt left over when that money runs out is a creditor’s loss.
In some cases, though, a family member might have to pay. Co-signers, such as on joint credit cards, mortgages or other loans, are on the hook for any remaining balance. And in community property states, the surviving spouse is responsible for marital debts.
Tips: Be careful about co-signing on credit accounts. And have enough life insurance to cover your debt.
Can I be arrested for debt?
Technically, no. Federal law bars debt collectors from threatening you with arrest or jail.
But debt collectors can sue for payment, and about 90% of people they sue don’t appear in court. That leads to a default judgment ordering repayment, and some collectors have used arrest warrants to get consumers to comply with such orders. That’s uncommon, though. Usually, courts order payment from your wages or bank account.
Tips: Know your rights when dealing with debt collectors, and never ignore a court summons.
Is there a maximum amount of debt I can take on?
The short answer is no. Lenders may offer more credit than you have the ability to pay back.
Tip: Debt can help you accomplish goals like owning a home or building a business, but be realistic about what you can repay.
Will bankruptcy erase all my debt?
Alimony and child support obligations can’t be erased in bankruptcy. Student loans, tax debt and judgments can be difficult to eliminate, as well.
Tip: If you’re struggling with overwhelming debt, consult a nonprofit credit counselor and bankruptcy attorney to see if bankruptcy might make sense.
Sean Pyles is a staff writer at NerdWallet, a personal finance website. Email: [email protected]