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Thread: Bad credit, collections & what to do

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    Dizzy Bad credit, collections & what to do

    The long & short of it - I have about 8-10K in credit card debt. All the debt is past my states Statue of Limitations, and the collection calls and letters are getting fewer and farther between. I even got one random letter from the courthouse saying that one creditor had decided to drop a case against me and I needed to take no further action (which was odd - considering I never received a letter of summons or anything).

    And now I'm trying to figure out what to do. I'm just starting to make real money in the past two months (to give you an idea, the past two years I made under 11K each year). I want to pay off my debts but read so many conflicting things and feel overwhelmed. To start with:

    I have no idea which collection agency owns which debt. I've had letters from agencies that when I checked with my credit report, weren't listed as the ones whom had it, but they were sending me letters demanding payment OR

    I would get a letter demanding a debt that I owed and the debt for some reason wasn't even LISTED on my credit report. Weird.

    When it comes to paying it, the whole "mark" between "Settled", "Paid", "Paid in Full" etc. Which means what to my credit score, and how to get the balances lowered without it hurting me more than the negative balance itself. I mean hell - there's one card that the month before it went to collections was at 1600 - and now the collection agency is saying that with the "interest" they have charged, I owe 3400! When the bought my debt for pennies on the damn dollar.


    I want to be able to buy myself a car within a few years, and need to start working on my credit. One person told me that since it's been 4 years, I should just wait it out for the big 7 year mark and not do anything - but that seems crazy. All I know is, at the end of the day, my fiance and I also want to get married in the future, and I really don't want to do that with my debt becoming his debt - he has great credit history, I want to work on mine now too and finally be a big girl about it. I just with it wasn't so overwhelming.


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    Default Re: Bad credit, collections & what to do

    I would take a look at your credit report and give all of those numbers on there a call. Also, try using www.creditkarma.com if you haven't already. It's a free site and it updates you on everything and there are tons of forums that tell you how to fix it. About the car and if you need an apartment I'd pay cash. I've been told that if you let debit fall (5 years I think) and you pay it off it will stay on your report for another 5+ years. Also, once you pay your debits send them all letters asking them to remove their name/negatives off of your credit report. It usually just takes a letter to get it down.

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    Default Re: Bad credit, collections & what to do

    You are able to get a copy of all 3 of your credit reports (experian, transunion and equifax) for free once a year. I would recommend you pull all 3 just to see where you stand. Negative entries can remain on your account for 7 years from the time you were delinquent. If you've never paid on them and it's been on your credit report for 7 years or more then you can have them removed. They may or may not just automatically come off. Sometimes they come off automatically and sometimes you have to submit a request but the process is very simple. The 7 years is from the original date of delinquency.

    In terms of settled versus paid in full, paid in full is always better. Settled just means you took a deal and paid some of it off. Now to potential creditors this can be good and bad. It says you were still late paying your bills but you have "settled" so none of your current income is going to be going towards that debt. So you have more money to go towards whatever new debt you're trying to acquire.

    If it's only been 4 years then you still have 3 years to wait and that's a long time to wait if you need a car now. But I have never seen a auto dealership deny anyone. They may require a higher down payment or a give you a much higher interest rate but they usually have some way of making it work out so you can get a car since they want to sell you the car as much as you want to buy it. I'm not saying it doesn't happen but the finance company/dealership usually does whatever they can to make the sell.

    If I were you, I'd pull my reports and start tracking down who currently holds all of your debts. If anything is over 7 years old, submit a request to have these removed from your report. You can do this online directly with the credit reporting agencies not the collection agencies. And then from there you can evaluate what you have left and go from there.

    Also the 7 years is for basic debts like credit cards since that's what you said you had. Some things like chapter 7 bankruptcies can stay longer.

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    Default Re: Bad credit, collections & what to do

    well, don't know what state you're in or how they do it, but watch out some of them don't get a judgment against you. You would be served, of course, then have to go to court, unless you can negotiate (they will try to get you to sign an agreement to pay so much monthly before you appear before judge) or get a lawyer to do it for you, which of course co$ts..try nolo.com a good legal starting out source
    Have you considered filing for bankruptcy..weighing the pros/cons of course. Good luck


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    Default Re: Bad credit, collections & what to do

    Those things are never going to delete from your credit report until 7 years after they have been paid- whether in full or settled. You can wait for "the 7 year mark" but just know that they will not disappear because they continue to resell the debt to another agency/attorney before the 7 year mark, then its another 7 years, and another, and another. So they will not disappear. I thought the same thing about my medical debt until my attorney told me this. It won't go away... ever. Until 7 years from when its paid off or discharged in bankruptcy.

    I would consider filing chapter 7 bankruptcy. It will probably cost you $1200 or less for everything... court fees and attorney fees. But then you will owe nothing unless you have student loans. That way all of it will be gone for good. Its just a myth that filing bankruptcy will destroy your credit. Its already destroyed. And even if you paid off everything right now, they would still remain on your credit report for years with a note next to it saying "paid in full, date: ___" or "settled, date: ___" I'm 99.99% sure bankruptcy is your best option since you have implied you make under 48k/year and you have no car. Unless you have some other assets, its worth it.

    Make sure you have an apartment/place to live for awhile before you file. Otherwise its really a hassle. But otherwise, you should have no problems.

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    Senior Member SydneyBrooke's Avatar
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    Default Re: Bad credit, collections & what to do

    According to the 3 credit reporting agencies, they come off after 7 years of first negative report. Mu st be true because after I disputed 6 things, they removed them all. They don't always automatically come off, you may have to dispute.

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    Default Re: Bad credit, collections & what to do

    Quote Originally Posted by DarlaSummers View Post
    The long & short of it - I have about 8-10K in credit card debt. All the debt is past my states Statue of Limitations, and the collection calls and letters are getting fewer and farther between. I even got one random letter from the courthouse saying that one creditor had decided to drop a case against me and I needed to take no further action (which was odd - considering I never received a letter of summons or anything)..
    What do you mean by your "states statue of limitations"?
    There are ALOT of legal proceedings that happen around debt that do not include the customer. For example court orders for garnishments, court orders to freeze accounts, etc. Hang on to that letter.

    Quote Originally Posted by DarlaSummers View Post
    And now I'm trying to figure out what to do. I'm just starting to make real money in the past two months (to give you an idea, the past two years I made under 11K each year). I want to pay off my debts but read so many conflicting things and feel overwhelmed. To start with:
    I have no idea which collection agency owns which debt. I've had letters from agencies that when I checked with my credit report, weren't listed as the ones whom had it, but they were sending me letters demanding payment OR
    I would get a letter demanding a debt that I owed and the debt for some reason wasn't even LISTED on my credit report. Weird.)..
    Here is the dirty little secret about debt; debt is sold to collections agencies, then that agency can sell it again, and so on. Every time it is sold the 7 year time frame on your credit report starts over. So it might never drop off your credit report without you paying something.
    You have two choices: 1. Settle the debt for a lower amount with a guarntee in writing it will then be removed from the report
    2. Bankruptcy
    What I would advice you is to call the orginal credit card company. Ask them about settling the orginal debt with a guarntee in writing it will be removed from the credit report. If they say we cant the debt was sold to x collection agency then you call them. If you that collection agency isnt holding the debt and had sold it, then you should file bankruptcy. Why? Because the chances of you being able to find the right holder of the debt becomes impossible and there is no chances the terms you discuss will be upheld without bankruptcy protection. If you are able to settle, get the agreement IN WRITING before you pay a dime of the settlement.

    Quote Originally Posted by DarlaSummers View Post
    When it comes to paying it, the whole "mark" between "Settled", "Paid", "Paid in Full" etc. Which means what to my credit score, and how to get the balances lowered without it hurting me more than the negative balance itself. I mean hell - there's one card that the month before it went to collections was at 1600 - and now the collection agency is saying that with the "interest" they have charged, I owe 3400! When the bought my debt for pennies on the damn dollar.
    I want to be able to buy myself a car within a few years, and need to start working on my credit. One person told me that since it's been 4 years, I should just wait it out for the big 7 year mark and not do anything - but that seems crazy. All I know is, at the end of the day, my fiance and I also want to get married in the future, and I really don't want to do that with my debt becoming his debt - he has great credit history, I want to work on mine now too and finally be a big girl about it. I just with it wasn't so overwhelming.
    Settled and Bankruptcy is the same in a lenders eyes. It will take 7 to 10 years for them to fill off your credit report AFTER they have been finalized. Paid in full is the best. But after a long history of non payment not even paid in full will help that much.

    I am going to tell you the hard truth based on my experiance as a loan officer.... If you had tackled this early on it wouldnt have been this bad. But now that collection agencies are involved you are at their mercy for how much you actually owe. Waiting seven years isnt going to fix your credit report because every time the debt is sold it will all start all over. I laid out your choices above.

    If it was me? I would file bankruptcy now ASAP. Make sure everything is included on it. Start the seven or ten year clock ticking now. You will have to jump thru hoops but you can still get it done. Then start saving for a car instead of doing a loan.
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    Default Re: Bad credit, collections & what to do

    Quote Originally Posted by SydneyBrooke View Post
    According to the 3 credit reporting agencies, they come off after 7 years of first negative report. Mu st be true because after I disputed 6 things, they removed them all. They don't always automatically come off, you may have to dispute.
    Disputing collections rarely ever work. They are only removed if the collection agency or lender doesnt respond to the dispute or they cant prove the amount is owed. Late payments and small amounts are easy to dispute because the cost to respond is more then the collection. But when it comes it large amounts ie over 1k they respond.
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    Featured Member Vamp's Avatar
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    Default Re: Bad credit, collections & what to do

    Btw if you want to look at your credit reports the only free site is www.annualcreditreport.com. It is a government sponsered website and only charges a few bucks for the score. But it will list all the negative items on your report.
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    Default Re: Bad credit, collections & what to do

    Elaborating on what was pointed out by others, the statute of limitations technically only applies to the 'original' debt. When the original debt is sold to a collection agency ( for pennies on the dollar ), this technically becomes a 'new' debt ... and starts a fresh statute of limitations 'clock'. The collections industry is very well aware of this, and 'plays the game' such that the debts owed will never go away, but keep reappearing under different creditor names ( with added interest and penalty charges ).

    Truthfully, you need to figure out exactly how much money you now owe to your various creditors. You then need to compare that to the amount of ( after-tax ) money that you are now earning. You also need to calculate the amount of money you must spend for 'costs of living' ... which in turn will show you how much money you can afford to pay towards your outstanding debts and how long it is likely to take if you were to pay them off.

    If you're talking about being able to pay off all of your debts within a year, this is probably the least 'painful' option net of legal fees, net of lingering negative credit reports etc. If all of your debts are paid off in full a year from now, your credit report can then start building a 39 month history of timely payments and zero additional delinquencies ... which will result in a decent credit rating 4-5 years down the road.

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    Default Re: Bad credit, collections & what to do

    Your debt does not restart every time it is a sold. Under the Fair Credit Reporting Act (section 605 in case you actually want to read it), a collection account can only remain on your credit report for 7 years and 180 days from the date you fell behind with the original creditor. Not every single time it is sold. Yes your debt can be sold but after 7 years from the original date of delinquency, it has to be removed. Collection agencies may tell you that but it's a lie and it is illegal. But don't take my word for it.

    http://www.experian.com/ask-experian...it-report.html
    http://www.ftc.gov/os/statutes/031224fcra.pdf (section 605)

    If anyone has anything to dispute this, I would love to see when the Fair Credit Reporting act was changed or amended.

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    Default Re: Bad credit, collections & what to do

    Quote Originally Posted by Vamp View Post
    Disputing collections rarely ever work. They are only removed if the collection agency or lender doesnt respond to the dispute or they cant prove the amount is owed. Late payments and small amounts are easy to dispute because the cost to respond is more then the collection. But when it comes it large amounts ie over 1k they respond.
    Even if the collection agency responds, they can only respond with the truth. And if it shows that these debts were over 7 years old then it must be removed. They can't just say "nope it's valid. Leave it there so we can keep collecting on it". They must respond with the proper documentation showing the original debt and when the account originally went delinquent.

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    Default Re: Bad credit, collections & what to do

    If anyone has anything to dispute this,
    the 'underhanded' method that collection agencies use to get around this is by classifying different portions of the debt as having started at different times. Take for example the case of a dep't store credit card debt that went delinquent. After 18 months or so of unsuccessful collection efforts, the dep't store sells the debt to a collection agency. While it is technically true that the original amount owed by the credit card holder to the credit card company on the date that it was sold to the collection agency is bound by the FCRA 7 year limit from the time that the dep't store credit card account originally went delinquent, the penalty charges and interest charges tacked on by the collection agency ... if the subject of a successful judgement sought by the collection agency independent of the dep't store ... are not. The collection agency will typically wait 6 months from the point of buying the dep't store debt before seeking said judgement ( while attempting to get the credit card holder to 'settle' ), so the FCRA 7 year limit on the collection agency judgement doesn't actually start running until 2 years after the original dep't store credit card account went into delinquency. This process can then be repeated with the collections agency (re)selling the bad debt to yet another collections agency after another 2 years have passed.

    So yes an original $10k dep't store credit card debt will be removed from the credit report after 7 years. But a subsequent $3k debt to a collection agency for penalty and interest charges will still appear, with the 'clock' being based on the date the judgement was granted.
    Last edited by Melonie; 01-29-2013 at 03:11 PM.

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    Default Re: Bad credit, collections & what to do

    Quote Originally Posted by Avamonet View Post
    Even if the collection agency responds, they can only respond with the truth. And if it shows that these debts were over 7 years old then it must be removed. They can't just say "nope it's valid. Leave it there so we can keep collecting on it". They must respond with the proper documentation showing the original debt and when the account originally went delinquent.
    Idk that's not what my lawyer told me. Of course you can challenge anything you want on your credit report and get it removed, but the fact of the matter is that, if its not paid in full, settled, or discharged in bankruptcy, it will keep appearing on your credit report because it will keep being sold to other companies who will report it to your credit report as delinquent. So even if its not supposed to happen, it still does. And you would literally have to pull your credit report every few months for the rest of your life just to watch it in order to remove it every time it appears.

    And actually, whil
    e we're at it, you can get most stuff on your credit report removed if you challenge it enough. But unpaid things will continue to reappear. Paid, settled, or discharged things will not.

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    Default Re: Bad credit, collections & what to do

    Quote Originally Posted by Melonie View Post
    the 'underhanded' method that collection agencies use to get around this is by classifying different portions of the debt as having started at different times. Take for example the case of a dep't store credit card debt that went delinquent. After 18 months or so of unsuccessful collection efforts, the dep't store sells the debt to a collection agency. While it is technically true that the original amount owed by the credit card holder to the credit card company on the date that it was sold to the collection agency is bound by the FCRA 7 year limit from the time that the dep't store credit card account originally went delinquent, the penalty charges and interest charges tacked on by the collection agency ... if the subject of a successful judgement sought by the collection agency independent of the dep't store ... are not. The collection agency will typically wait 6 months from the point of buying the dep't store debt before seeking said judgement ( while attempting to get the credit card holder to 'settle' ), so the FCRA 7 year limit on the collection agency judgement doesn't actually start running until 2 years after the original dep't store credit card account went into delinquency. This process can then be repeated with the collections agency (re)selling the bad debt to yet another collections agency after another 2 years have passed.

    So yes an original $10k dep't store credit card debt will be removed from the credit report after 7 years. But a subsequent $3k debt to a collection agency for penalty and interest charges will still appear, with the 'clock' being based on the date the judgement was granted.
    I would love to see where that's legal or where it's even done. Yes collection agencies use underhanded procedures (I know because I did collections for 2 years and hated every second of it because of how cutthroat it was). But doing something and it being legal are two totally different things. But yes I will agree shady companies will do shady things. But the whole point of the the amendments established in 1996/1997 were to prevent things like what you described from happening. The FCRA (since it was established in 1971) has ALWAYS prohibited creditors from reporting charge-offs that are over 7 years old. But as mentioned, creditors/collections agencies took advantage of this by saying "hey I know you opened this card in 2000 and you thought it would be off your credit report in 2007 but we didn't get it until 2004 so now you're stuck with it to 2011 unless we sell it again". The amendments established in 1997 were created to explicitly state that these bad debts or charge offs must be discharged and removed 7 years from the original date not when the new agencies receive the debt. The only circumstances these don't apply to are charge-offs incurred before 1997.

    And this has been the rule for the last 16 years so this is not new stuff. But again if I'm wrong, I would love to be educated as to when any amendments revoking or changing the preceding amendments came to pass. I searched and couldn't find anything so I would love to see it in writing. The previous links I provided as well as others that say the exact same thing were all I was able to find.
    Last edited by Avamonet; 01-29-2013 at 05:53 PM.

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    Default Re: Bad credit, collections & what to do

    Quote Originally Posted by GlamourRouge View Post
    Idk that's not what my lawyer told me. Of course you can challenge anything you want on your credit report and get it removed, but the fact of the matter is that, if its not paid in full, settled, or discharged in bankruptcy, it will keep appearing on your credit report because it will keep being sold to other companies who will report it to your credit report as delinquent. So even if its not supposed to happen, it still does. And you would literally have to pull your credit report every few months for the rest of your life just to watch it in order to remove it every time it appears.

    And actually, whil
    e we're at it, you can get most stuff on your credit report removed if you challenge it enough. But unpaid things will continue to reappear. Paid, settled, or discharged things will not.
    Well if that's the case, why file bankruptcy? I mean if credit agencies can just report anything they want regardless of the law then couldn't they just keep reporting debts even after it's been discharged due to bankruptcy? I mean yeah it's illegal but like you said they can just do what they want right? Or what if wrong information is on your credit report and you dispute it and have it removed only to find that it's been added back? Should people not fight that either? All they can do is sit there and monitor for the rest of their life, I guess.

    I'm not saying things like you mentioned haven't happened. What I am saying is after 7 years from the original delinquency date (of the original creditor), a creditor/collection is required to remove negative entries from a credit regardless of when any new or subsequent agencies acquired the debt and they will usually do so. And the OP and anyone else who has a charged-off debt over 7 years is well within her rights under the FCRA to dispute these things. And this is not my opinion or here-say. This is a black and white federal law enforced by the federal trade commission.

    And yeah true while you're at it, you can dispute anything (even valid debts) if you really want to but the difference is those debts would not be eligible for removal by any provision or amendment of the FCRA. The consumer wouldn't have a leg to stand on and the creditor knows this so of course they would report it again. It's legitimate.

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    Default Re: Bad credit, collections & what to do

    Quote Originally Posted by Avamonet View Post
    Well if that's the case, why file bankruptcy?
    Like I said, its a smart idea to file bankruptcy (and I did it) because no new company can buy the debt, thus it will NO longer report the account on your report as delinquent because its not anymore. Best thing I ever did was file.

    And it only keeps being added back to your report because new attorneys/collection agencies buy it and then report it. Its not the same company over & over unless the debt is in fact valid. Its new companies its sold to, and they have the right to report it (just as you have the right to challenge it). And the older the debt it, the more often it will be sold. If its discharged in bankruptcy, its a $0 balance so its essentially a paid off account and will no longer keep being reported. No company would report a $0 balance account to your credit report because there's no point.

    Again, if you just ignore the debt and don't pay in full, settle, or discharge it in bankruptcy, it will keep showing up on your report each time its sold. Again, each new company who buys it has the right to report it to your credit bureaus and list it on your credit report til you challenge it. And it will continue to be sold for the rest of your life and you will not be alerted when its sold, so you'll have to pull your credit report every few months and then file dispute and dispute every few months when its sold. With bankruptcy, that will never happen again because only unpaid (unsettled) debts are reported, not ones with a $0 balance.

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    Default Re: Bad credit, collections & what to do

    Quote Originally Posted by Avamonet View Post
    I would love to see where that's legal or where it's even done. Yes collection agencies use underhanded procedures (I know because I did collections for 2 years and hated every second of it because of how cutthroat it was), but doing something and it being legal are two totally different things. But yes I will agree shady companies will do shady things. But the whole point of the the amendments established in 1996/1997 were to prevent things like what you described above from happening. The FCRA (since it was established in 1971) has ALWAYS prohibited creditors from reporting charge-offs that are over 7 years old. But like you said creditors/collections agencies took advantage of this by saying "hey I know you opened this card in 2000 and you thought it would be off your credit report in 2007 but we didn't get it until 2004 so now you're stuck with it to 2011 unless we sell it again". That's why the amendments established in 1997 were created so that they explicitly state that these bad debts or charge off must be discharged and removed 7 years from the original date not when the new agencies receive the debt and collections agency. The only circumstances these don't apply to are charge-offs incurred before 1997.

    And this has been the rule for the last 16 years so this is not new stuff. But again if I'm wrong, I love to be educated as to when any amendments revoking or changing the preceding amendments came to pass. I searched and couldn't find anything so I would love to see it in writing. The previous links I provided as well as others that say the exact same thing were all I found.
    First of all I want to say I am not a lawyer. I was a banker aka loan officer for 12 years. I give advice based on my experiance of helping people fix their credit to get approved for loans. Laws are constantly changing. Even the FCRA has changed alot since 1971. If you actually look at the foot notes of section 605 you will see it has been amended many times from 1995 to 2008. Mostly because the collection agency lawyers found ways around things and new legislation had to come about to take care of that.

    I agree with Melonie though. There are too many loop holes in FCRA still.

    If you go to page 69 to 72 of the pdf you provided for the FCRA... Another way collection agencies get around the deliquency date is when the orginal creditor does not provide it. They should no later then 90 days after the orginal report to the collection agencies. But they are not required to. If you read father down about the dispute process, the consumer must prove the orginal deliquency date with documentation if the orginal creditor did not.
    Last edited by Vamp; 01-29-2013 at 06:37 PM.
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    Default Re: Bad credit, collections & what to do

    Quote Originally Posted by GlamourRouge View Post
    Like I said, its a smart idea to file bankruptcy (and I did it) because no new company can buy the debt, thus it will NO longer report the account on your report as delinquent because its not anymore. Best thing I ever did was file.
    .

    ^^^^Exactly! They call it bankruptcy protection for a reason.
    Nature knows no indecencies; man invents them. ~ Mark Twain


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    Default Re: Bad credit, collections & what to do

    Quote Originally Posted by GlamourRouge View Post
    Like I said, its a smart idea to file bankruptcy (and I did it) because no new company can buy the debt, thus it will NO longer report the account on your report as delinquent because its not anymore. Best thing I ever did was file.

    And it only keeps being added back to your report because new attorneys/collection agencies buy it and then report it. Its not the same company over & over unless the debt is in fact valid. Its new companies its sold to, and they have the right to report it (just as you have the right to challenge it). And the older the debt it, the more often it will be sold. If its discharged in bankruptcy, its a $0 balance so its essentially a paid off account and will no longer keep being reported. No company would report a $0 balance account to your credit report because there's no point.

    Again, if you just ignore the debt and don't pay in full, settle, or discharge it in bankruptcy, it will keep showing up on your report each time its sold. Again, each new company who buys it has the right to report it to your credit bureaus and list it on your credit report til you challenge it. And it will continue to be sold for the rest of your life and you will not be alerted when its sold, so you'll have to pull your credit report every few months and then file dispute and dispute every few months when its sold. With bankruptcy, that will never happen again because only unpaid (unsettled) debts are reported, not ones with a $0 balance.

    Bankruptcy can absolutely be a good choice based on an individual's unique situation. I know people who have had a second chance at life because of filing chapter 7 or 13. So in your case, that's great. That wasn't the point I was making when I said that but I definitely have no opposition to it in the right situations. I personally would never file bankruptcy if the statute of limitation (state not federal) had passed and it had been 7 years from the original date because these items aren't legitimate, can easily be removed and are required to be discharged. And even if I had to check my credit report every few months to make sure that incorrect and invalid items weren't there (even though I don't think it's necessary but I'll roll with your example), it would be worth it to me as opposed to having a new VALID bankruptcy that is now going to be on my credit for 10 more years. But again if it worked for you, that was the best choice. And everyone should do what's best for them after having the correct information. On everything else, I'll just agree to disagree and leave it at that.

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    Default Re: Bad credit, collections & what to do

    Quote Originally Posted by Avamonet View Post
    I personally would never file bankruptcy if the statute of limitation (state not federal) had passed and it had been 7 years from the original date because these items aren't legitimate, can easily be removed and are required to be discharged. And even if I had to check my credit report every few months to make sure that incorrect and invalid items weren't there (even though I don't think it's necessary but I'll roll with your example), it would be worth it to me as opposed to having a new VALID bankruptcy that is now going to be on my credit for 10 more years.
    Yes, but even if the debt isn't on your credit report, and is removed after 7 years, you still will owe it. All the 7 years means is that its not listed on your report and you can't be sued over it. And it will still keep showing up on your credit report when its sold, which is a much bigger (and costlier) issue than filing a one-time chapter 7 bankruptcy (unless you have a ton of assets). Or even chapter 13 (where you still pay your debts in an arranged payment plan), is still a smarter move if you have assets. After bankruptcy you can rebuild your score, but your score won't rebuild if you keep having collections items (re)appear on it from past debt you still owe.

    The great thing about bankruptcy is, all the bad things you hear about it are from credit card companies because they don't want you to file. In the end, no one really cares if they see "bankruptcy" on your report. A few select places, but not many. You can still rent a house, get credit cards (usually you'll get offers immediately after discharge because they know you can't file again for awhile), and car loans. Its going to be based more on your credit score than if "bankruptcy" is listed on your report. And if you already have items in collections, your credit score is already bad so the "bankruptcy" doesn't make much of a difference. Hasn't Donald Trump even declared it before like 5 times? Its really not a big deal. Its often the smart financial choice- especially if you have no assets.


    Quote Originally Posted by Avamonet View Post
    I personally would never file bankruptcy if the statute of limitation (state not federal) had passed and it had been 7 years from the original date because these items aren't legitimate, can easily be removed and are required to be discharged.
    No it can't, because you technically still owe it until its either 1.) paid in full, 2.) settled for an agreed upon amount, or 3.) discharged in bankruptcy. The 7 year mark just basically means you can't be sued and it can be removed from your report because its old, but it will continue to be added back by those who keep buying and selling it, for the rest of your life.




    I actually just double checked. Yes, what I said is correct. Here's an example:

    Q: What happens to an unpaid debt after 7 years?
    I've heard if a debt is seven years old that there is no point in paying the collection agency who has the case. Will it improve your credit score to pay it off at this point?

    A: You have two different time lines mixed up.

    First is the one in the Fair Credit Reporting Act which says that derogatory accounts will show for 7-years from the date of first delinquency.

    The second is the statute of limitations which varies from State to State and by what type of debt you are talking about.

    This is the legal time that people can sue in court and get a judgment. Once the S.O.L. has passed you can still be sued but all you have to do is show the court that the S.O.L. has expired and the case will be dismissed.

    I have posted a link so you can look up your State at the bottom.

    There is no time limit on how long people can attempt to get you to pay. Never admit that a debt is yours and never pay a dime on one that is past the S.O.L. because this will restart the S.O.L.

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    Default Re: Bad credit, collections & what to do

    Quote Originally Posted by GlamourRouge View Post
    Yes, but even if the debt isn't on your credit report, and is removed after 7 years, you still will owe it. All the 7 years means is that its not listed on your report and you can't be sued over it. And it will still keep showing up on your credit report when its sold, which is a much bigger (and costlier) issue than filing a one-time chapter 7 bankruptcy (unless you have a ton of assets). Or even chapter 13 (where you still pay your debts in an arranged payment plan), is still a smarter move if you have assets. After bankruptcy you can rebuild your score, but your score won't rebuild if you keep having collections items (re)appear on it from past debt you still owe.

    The great thing about bankruptcy is, all the bad things you hear about it are from credit card companies because they don't want you to file. In the end, no one really cares if they see "bankruptcy" on your report. A few select places, but not many. You can still rent a house, get credit cards (usually you'll get offers immediately after discharge because they know you can't file again for awhile), and car loans. Its going to be based more on your credit score than if "bankruptcy" is listed on your report. And if you already have items in collections, your credit score is already bad so the "bankruptcy" doesn't make much of a difference. Hasn't Donald Trump even declared it before like 5 times? Its really not a big deal. Its often the smart financial choice- especially if you have no assets.




    No it can't, because you technically still owe it until its either 1.) paid in full, 2.) settled for an agreed upon amount, or 3.) discharged in bankruptcy. The 7 year mark just basically means you can't be sued and it can be removed from your report because its old, but it will continue to be added back by those who keep buying and selling it, for the rest of your life.




    I actually just double checked. Yes, what I said is correct. Here's an example:

    Q: What happens to an unpaid debt after 7 years?
    I've heard if a debt is seven years old that there is no point in paying the collection agency who has the case. Will it improve your credit score to pay it off at this point?

    A: You have two different time lines mixed up.

    First is the one in the Fair Credit Reporting Act which says that derogatory accounts will show for 7-years from the date of first delinquency.

    The second is the statute of limitations which varies from State to State and by what type of debt you are talking about.

    This is the legal time that people can sue in court and get a judgment. Once the S.O.L. has passed you can still be sued but all you have to do is show the court that the S.O.L. has expired and the case will be dismissed.

    I have posted a link so you can look up your State at the bottom.

    There is no time limit on how long people can attempt to get you to pay. Never admit that a debt is yours and never pay a dime on one that is past the S.O.L. because this will restart the S.O.L.

    http://www.bcsalliance.com/index.html
    I must be really confused because what you just posted says

    "First is the one in the Fair Credit Reporting Act which says that derogatory accounts will show for 7-years from the date of first delinquency.

    The second is the statute of limitations which varies from State to State and by what type of debt you are talking about.

    This is the legal time that people can sue in court and get a judgment. Once the S.O.L. has passed you can still be sued but all you have to do is show the court that the S.O.L. has expired and the case will be dismissed."

    What have I said that it is not in agreement with those 2 statements? That's what I've been saying the whole time. The first point says that according to The FCRA, the account will show 7 years from the date of first (original) delinquency. That's what I've said. And the second point says that you can be sued beyond the statute of limitations but all you have to do is show the court this and the case will be dismissed. Meaning you won't owe a thing because the case is dismissed. I've been saying this the entire time. Please show me where I've disagreed with this.

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    Default Re: Bad credit, collections & what to do

    Quote Originally Posted by Vamp View Post
    First of all I want to say I am not a lawyer. I was a banker aka loan officer for 12 years. I give advice based on my experiance of helping people fix their credit to get approved for loans. Laws are constantly changing. Even the FCRA has changed alot since 1971. If you actually look at the foot notes of section 605 you will see it has been amended many times from 1995 to 2008. Mostly because the collection agency lawyers found ways around things and new legislation had to come about to take care of that.

    I agree with Melonie though. There are too many loop holes in FCRA still.

    If you go to page 69 to 72 of the pdf you provided for the FCRA... Another way collection agencies get around the deliquency date is when the orginal creditor does not provide it. They should no later then 90 days after the orginal report to the collection agencies. But they are not required to. If you read father down about the dispute process, the consumer must prove the orginal deliquency date with documentation if the orginal creditor did not.
    Laws are constantly changing but you abide by whatever is in effect at the time. And of course I know there are amendments because I've been citing the amendments from 1996/1997 but no one else who has been in opposition with me has been able to cite anything "proving" otherwise. I just keep getting "someone told me" and "I heard". I will believe anything anyone tells me as long as they can show proof. That's all I've ever asked. The bottom of page 69 which you referred to specifically states "....for purposes of this paragraph only and provided that the consumer does NOT dispute the information...", then they will have to provide the original date. Well what have we been talking about this whole time is the fact that the customer is disputing so that doesn't even apply.

    But yeah I feel the OP definitely has enough information to make an informed decision. So like I told Glamour, we can agree to disagree but at anytime if anyone wants to show me an amendment that changes anything, I will be glad to look at it. But actual amendments not ones that "could happen" or "someone heard" happened but a real link with verifiable information since this is the law it shouldn't be hard. I have no problem admitting i'm wrong when I see evidence that I am.

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    Default Re: Bad credit, collections & what to do

    ^^^ Avamonet, I understand where you are coming from ... I truly do. But what's being discussed here is not the idealistic wording of a particular law under ideal enforcement conditions, but the de-facto results of bad debt resales, collection agency filings, small claims court judgements, credit reporting agency procedures, etc.

    Yes if a debtor is willing to put forth the effort ( and potential legal fees ), it's possible to have a resold debt removed from the debtor's credit report. But this does not accomplish any 'permanent' solution, because that collection agency will simply resell that non-satisfied, non-discharged debt to a new collection agency. The penalty and interest charges tacked onto that debt will then reappear on the debtor's credit report under a new creditor's name with a later date, and the debtor will then have to put forth a new effort ( and potential legal fees ) to challenge THAT judgement and negative credit report.

    As GlamouRouge already pointed out, the only practical real world methods of permanently stopping this vicious cycle are to either A. pay the debt off in full, B. enter into a settlement agreement which explicitly satisfies the debt in full, or C. file for bankruptcy protection that discharges the debt via court ruling. Anything short of these WILL result in the unsatisfied debt continuing to reappear on the person's credit report under new creditor names with new dates ... despite the fact that the letter of the law supposedly does not allow this to happen.

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    Default Re: Bad credit, collections & what to do

    Quote Originally Posted by Melonie View Post
    ^^^ Avamonet, I understand where you are coming from ... I truly do. But what's being discussed here is not the idealistic wording of a particular law under ideal enforcement conditions, but the de-facto results of bad debt resales, collection agency filings, small claims court judgements, credit reporting agency procedures, etc.

    Yes if a debtor is willing to put forth the effort ( and potential legal fees ), it's possible to have a resold debt removed from the debtor's credit report. But this does not accomplish any 'permanent' solution, because that collection agency will simply resell the debt to a new collection agency, the penalty and interest charges tacked onto that debt will then reappear on the debtor's credit report under a new creditor's name and a later date, and the debtor will then have to put forth a new effort ( and potential legal fees ) to challenge THAT judgement and negative credit reporting.

    As GlamouRouge already pointed out, the only real world methods of permanently stopping this vicious cycle are to either A. pay the debt off in full, B. enter into a settlement agreement which explicitly satisfies the debt in full, or C. file for bankruptcy protection that discharges the debt.
    I'm not arguing for the sake of being right. I swear I hate arguing and generally just let things go. I too have heard the exact same things that you, Glamour and Vamp are saying and took them as truth. But once I started working in the industry I found out it simply wasn't true. I know there are agencies who break rules to make it seem this way but just because someone breaks rules and does something they aren't supposed to do doesn't make it right or enforceable. And I can even agree that a person might be a little inconvenienced when initially disputing these things but it still doesn't change facts. And the practice of reselling debt to "reage" an account and extend the 7 years is not legitimate and can get companies in big trouble.

    But I will leave everyone with this article and I'm done. This is actually from the Federal trade commission. Again, I don't make this stuff up.

    http://www.ftc.gov/opa/2007/03/camco.shtm

    It's really not a long article so I would encourage anyone that's interested in this thread to read it. But basically there was a case where consumers sued a collection agency for trying to get them to pay "old, unenforceable debts or debts they did not owe.".

    According to the article from the Federal Trade Commission " Most of the debts that CAMCO attempted to collect were well past the statute of limitations, and therefore unenforceable in court. Many of the debts also were more than seven years old, and therefore beyond the credit reporting period allowed under the Fair Credit Reporting Act."

    Not only was the company sued and made to pay a settlement but the company was also shut down and prohibited from engaging in debt collection activities.

    Companies cannot just buy debts and keep re-aging them and get away with it. But just because they continue to do it, doesn't change the law, it just makes them unethical and if someone encounters this there is legal recourse.

    As an aside, the fact that everyone was so adamant that I was wrong made me question myself a little. Like I said, all I care about is correct information not being right. So I started looking for anything that supported the argument and I couldn't find anything.

    All I found was

    http://www.rethinkingdebt.org/news/s...ations-on-debt
    http://www.bankruptcylawnetwork.com/...ecting-a-debt/
    http://carreonandassociates.com/arti...ortingtime.htm

    and a host of articles that said the exact same thing. So I even tried to prove myself wrong and couldn't do it.

    So yeah I'm done. I have provided references, articles, and amendments so at this point anyone is free to believe whatever they want to. You won't hear a peep out of me.

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