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im a little confused since i started the debt reconciliation process. i have an old account with the old mbna before it was bought out by someone. well they sold it to someone else who apparently sold it to someone else. this debt is originally from like 1998 and i cant figure out for the life of me how it keeps staying active. it seems like everytime someone buys it the thing gets a new lease on life. not to mention its gone from being 1800 to almost 5000$.

everytime one of these junk collectors buys a debt does it renew itself or something? i live in pennsylvania and according to the law here this thing should have been done with a couple years ago. sorry if its a dumb question im just confused and overwhelmed by all of this.




Debts do not go away because time passes, but the sale of a debt does not renew the SOL. If you aren't going to pay the debt, then send a cease and desist letter; when the debt is sold to a new collection agency, repeat the letter.

Sub: #1 posted on Wed, 03/26/2008 - 01:06

Morningstar Morningstar

(Posts: 1634 | Credits: 124.78)

is the new owner of the debt required to clean the report off the CB's if the debt is past the SOL?

Sub: #2 posted on Wed, 03/26/2008 - 04:22

Unregistered


Don't confuse SOL with reporting period!

The SOL governs whether or not a creditor is allowed to take legal action to recover a debt through the courts. It starts on the date of last activity, ie, the date of the last charge or payment on the account, and it varies by state. The average is about 5 years. Making a new charge or payment on the account, or [in some cases] making a promise to pay, will restart the SOL from Day 1. If that happens, you can find yourself in court, no matter how old the debt is.

The reporting period is the length of time that a debt can legally be reported in your credit file, ferinstance, at TransUnion. That period is 7 1/2 years following the date of last activity.

Sub: #3 posted on Wed, 03/26/2008 - 05:00

unclewulf unclewulf
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(Posts: 3173 | Credits: 315.03)

yes thats where i was getting confused. but the replies actually answered two questions for me.

i originally thought it got wiped away after 7 years from the initial bad action. so apparently i was incorrect. i thought maybe i would get lucky on this one! at least now that i know the SOL has expired for sure since it isnt renewed with new companies purchasing the debt (10 yrs old) i have some negotiating power since they have to legal recourse to collect. i'll give them the option to deal with me or they will get a cease and desist letter and i'll try my luc with the next company that buys it. sorry but im not paying almost 5000 for a debt that was less then half that.

Sub: #4 posted on Wed, 03/26/2008 - 05:43

plnoldrick plnoldrick

(Posts: 4 | Credits: 3.57)

As I understand the reporting period, it's like this: Say you have an account, and you make the last purchase on it in June, 2000. After that time, you make no further charges or payments of any kind. Federal law requires that the account be charged off to P/L after 180 days of no activity. That's December, 2000. Six months. It will have shown up on your credit report before then, but bear with me. The reporting period runs from that statutory charge-off date, for seven more years. So, in my overly simplistic example, the account will 'fall off' your report in December of 2007, 7 1/2 years after the date of last activity.

Now, if your state has a SOL of, say, 4 years, that's different. That means that the creditor or successors/assigns have that long from the date of last activity [not the charge-off date] to file a 'timely' civil suit on the account. They can still file, and still win, after that. You have to appear in court and raise the SOL as an affirmative defense in order to use it.

Anyway.... Be damn careful with negotiating. Do everything in writing, and pay absolutely nothing without a signed, written agreement. Avoid admitting, or even hinting, that the debt is yours.

On a 10+ year old account, I'd be tempted to offer 20-30% of face value. But only if I was feeling really generous that day. Good luck!

[somebody will pounce on my stupid ass if I'm wrong...]

Sub: #5 posted on Wed, 03/26/2008 - 06:40

unclewulf unclewulf
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SOO...tell me if I'm 'clear' on this. Taking WULF's example........if the SOL is up in 5 years, it can STILL be on your CR for 7 years? If the SOL has passed, can you 'dispute' it? The 'drop-off' date, on a CR is the date it will (supposely) come off your CR..right?

Sub: #6 posted on Wed, 03/26/2008 - 06:40

sdchargers_63 sdchargers_63

(Posts: 1798 | Credits: 179.17)

That's the way I understand it, SDC.

If the SOL has run, of course you can still dispute it! [I'm assuming we're talking credit reports here...] The 'drop-off date' is when ithas to be removed, under the FCRA. Disputing it mayget it removed earlier, or it may not. But passage of 7 1/2 yearswill do it.

Am I answering your question here?

Sub: #7 posted on Wed, 03/26/2008 - 06:48

unclewulf unclewulf
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[quote][somebody will pounce on my stupid ass if I'm wrong...] [/quote]

Wulf, I'm gonna pounce here, just for clarification.

The 7 year + 180 day clock starts ticking on the Date of First Delinquency (DOFD). In most cases that probably is the last date of activity, so your example works.

But suppose I open an account July 2005 and make on-time payments until Jan 2006. Then the account becomes delinquent. Suppose by May 06 I am past-due $500. I might pay $100 then, but that won't restart the FCRA clock because I didn't bring the account current. Even if I continue paying $50/mo, if I never bring the account current, then Jan 2006 will still be the DOFD. 7yrs+180 days from Jan 06 = June 2013 it will come off my credit.

Moral of my story is that A) the reporting period doesn't go by the date of last activity, it goes by the date the account fell behind; and B) making a payment will not restart the FCRA clock, unless you pay enough to bring the account current. Albeit, making a payment under any circumstance WILL restart the SOL clock.

Also...
Quote:
Federal law requires that the account be charged off to P/L after 180 days of no activity

That's not necessarily true as it isn't a Federal law. More or less it is a guideline set by a regulating agency like FDIC. The FDIC may require their member banks to follow that practice, and may revoke their membership if they don't follow it. But a small company like mine, as we have no FDIC involvement, don't have to follow those guidelines. I've been known to leave delinquent accounts on my books over 3 years - for various reasons - and that's perfectly legal in my case.

Sub: #8 posted on Wed, 03/26/2008 - 18:07

DebtCruncher DebtCruncher
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I'm sure I could gather more information from my files, just I am at home and not work.
Anyway when you dispute any tradline on your credit report, it gets turned into an electronic ACDV and sent to the creditor for verification. Below are "instructions" that appear on the creditors' version of your dispute (to make sure we follow the directions):

Sub: #9 posted on Wed, 03/26/2008 - 18:21

DebtCruncher DebtCruncher
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(Posts: 2296 | Credits: 269.79)

??
Thanks, bud! That's what I was hoping for, was clarification from the more-knowledgeable.

Sub: #10 posted on Wed, 03/26/2008 - 22:16

unclewulf unclewulf
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