[ephesmax]

ok so i have this credit card i defaulted on a few years back i think i was 19.
The balance with late fees and all of that [email protected] is about 5.6k origianlly i think it was like 2.3k
So now i have about 2k in my savings and ive heard mixed opinions about what i should do. Someone told me if i tell em all i got is 2k and ill have to file bankruptcy otherwise they might take they bait. Others have said if 7 years from when i defaulted (im 24 now) it somehow goes away.
can any of you help we decifer the myths from the facts outside of this card i have nothing else in default ao what should i do ?

 

[raab02]

Somehow goes away? I don't know for sure, but I highly doubt it.

Your sig line is a little ironic, methinks.

 

[Coop]

The problem with waiting 7 years is they will almost always either sue or sell it to a more aggressive collector before that happens.

Back in 2001 I first hurt my back and lost my job. I had a credit card I couldn't pay and defaulted on it. Last year I get a letter with a court date, right before the 7 years was up, 2 weeks actually. We were able to settle for half. For a credit card they can use much more aggressive techniques; liens, garnishes, sales, etc. At least in PA. I did a bunch of research because it changed hands about 4 times so I wanted to make sure I wasn't getting screwed.

For the record when that happened in 2001, that was the last time I have had a credit card. I used that experience to learn from my mistakes.

 

[gearman]

You need to pay on the debt. While it may be true that it will stay on your credit report for 4~10 years (depending on where you lived when the default was reported), in some cases creditors can sell the debt to a third party and the clock starts ticking all over again. It sounds like you don't have enough debt to declare any form of bankrutcy that would benefit you. In Ohio, bankruptcies can stay on your report 3 years longer than other defaults. If you have no other defaults and you are paying on the card, your credit score will likely start to improve in a relatively short time.

 

[DarkMatter]

TS, when discussing matters like this, it is best not to ask for answers on an online forum. There are already wrong answers here. Do the research and save money by handling the creditors yourself, or hire a credit counselor. To start with here are the Fair Credit Reporting Act, and the Fair Debt Collection Practices Act. These are the two federal laws which guide what debt collectors may and may not legally do to collect on any debt. Your state will have other laws which fill in the gaps.

What gearman refers to is called "reaging" and is 100% illegal in reference to debts which have passed their limitations upon being collected.

Fair Credit Reporting Act
http://www.ftc.gov/os/statutes/031224fcra.pdf

Fair Debt Collection Practices Act
http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre27.pdf

 

[silversx80]

Statute of limitations for unsecured debt varies by state. In NC, it's 4 years from the date of first default + 6 months... or something like that. In FL, I believe it's 5 years. That means that after that time passes, they cannot sue you and win. SOL is an ultimate defense if the time has passes (please research this for your state). They can still sue you and you'll still owe the money but they can't win in court. You also have to be careful that you don't renew the SOL by putting activity on the account. A payment or even a promise to pay (payment plan) can renew it.

Again, you still owe the money.

It'll come off your credit 7 years after the first default.

Now, since it's been about 5 years since your default, FL seems like 4 years (http://www.statuteoflimitations.net/florida_statute_of_limitations.htm). You have some pretty big negotiating power. If the debt has been sold to a debt collection company, it has been sold for pennies on the dollar (we're talking less than 10%). If the SOL is up, just wait until it comes off your credit.

If you settle, only settle for a very small fraction to be accepted as "payment in full" and "Payment for Deletion." This will remove the debt from your credit report and satisify the debt per the debtor.

 

[silversx80]

in some cases creditors can sell the debt to a third party and the clock starts ticking all over again.

Not only is that illegal, it is an automatic $1000 penalty toward the company.

 

[silversx80]

This link has a lot of good info: http://www.creditinfocenter.com/

 

[nyc rugby]

Not only is that illegal, it is an automatic $1000 penalty toward the company.

Because collection agencies always follow the rules...

 

[silversx80]

Because collection agencies always follow the rules...

Right

Still if this happenes, lawyer up and get your $1000. You may even be able to get that collector's license in your state removed.

 

[DANCOOL123]

Keep in mind that if you choose to settle the debt for half or whatever, You will have to pay income tax on the amount you did not pay. A lot of people do not realize this and the credit card company is required to tell you but they may or may not, As stated here earlier. they do not always follow the rules. I personally got bitten by the state because I forgot to claim it on my state return...
If you have ever worked in a credit dept for any company, whicH i have, you will see that credit reporting angencys keep 99 months of credit history, do the math on that and its is a littel over 8 years, I dont know where people get this 7 year stuff it as plain as day on your credit report 99 months.

 

[silversx80]

I dont know where people get this 7 year stuff it as plain as day on your credit report 99 months.

FCRA

I believe it's 7 years + 6 months since date of last activity on the consumer's part (the 180 day delinquency).

 

[RandyO]

when negotiating a settlement that is less than what you owe, find out if they are going to send you a 1099 for the amount that they write off

if they do, then you will be liable for the write off as if it were income and you will have to pay taxes

 

[DANCOOL123]

Yes the law sais 7 years plus 180 days after deliquincy, but the we already said they don't always follow the rules. Unles your particular credit card company is really on top of their game that mark will be there for 99 months. After 7 yrs you can dispute it and they have to take it off but unless you do it will be, again 99 months.

 

[DarkMatter]

it's not that hard to dispute something. in fact you can do it online.

 

[DANCOOL123]

i've disputed many times many times!!!! Do not be afraid to dispute, you can even dipute something you know belongs there, but the company may be lazy and not reply to your dispute and off it comes.

 

[ephesmax]

thanks for all the info guys i knew that this wasnt the best place to get proffesional advice but it proved to be a good place to start b/c of of all of your personel expieriences i now know how to start looking into an end to this i really appreciate it.
thanks
mikey c

 

[Suzanne]

UNPAID delinquent debt does NOT go away in 7 years. Paid delinquent debt will fall off your report after about 7 years. Hopefully, as long as the people at the reporting agency's are doing their job correctly. Most collection agency's will settle for a lesser amount than owed if they have been trying to collect for a while on an account. Sometimes they will charge it off and not contact you, but it will report on your CB as a CHARGE OFF + how many times your 30, 60, 90+ days late. I have worked in the credit business for too long now. Ugh.

 

[silversx80]

UNPAID delinquent debt does NOT go away in 7 years.

It never goes away but by law (Fair Credit Reporting Act), it is not allowed to be reported to the credit bureaus after 7 years. If it's still there after 7 years from the 180 day delinquent date you can dispute. If it isn't removed within 30 days then it's a $1000 fine payable to the consumer.

 

[nal_sv]

Tell the collections that you are unsure what they are talking about, and ask them to mail you some documentation about the alleged debt. Ask them to make all further communications through USPS mail, and specify that they may speak only with you. Once you get something on paper you can make a decision. Consulting a lawyer might be advisable. There are attourneys that specialize in this stuff. They can send a cease and desist letter to stop them from harrassing you, if that is happening. An attourney can also advise you about your states debt laws and how they stack with the Fair Debt Collections Act. If the statute of limitations has expired, there is nothing they can legally do.

As was mentioned, setteling with them might be faster and cheaper than the route mentioned above. IMO, wait until you get the written documentation of the debt. Negotiate with them for a settlement amount. Lowball them. As someone else mentioned they buy these for pennys on the dollar. DO NOT give them a check card number or your checking information. Make them send you another piece of paper with the agreed upon figure, and have it stated on there that they will appropriately amend your credit report, that the debt is completely paid for that amount, and that it will not be further sold to another agency. When you have all that, send them a money order for the agreed figure.


There is a lot of good info on the web about this stuff. Debt collection agencies are big business, and some of thier tactics are deplorable. Some of the companys have called peoples neighbors, thier relatives, thier employers, anyone they can think of to try and pressure people into paying. Often they buy debts outside the statute of limitations and attempt to collect them anyway.

Good Luck


Dan


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