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The Master Understanding SOL and 7 Year Reporting Thread
funkiehouse posted a topic in Credit ForumThe Master Understanding SOL and 7 Year Reporting Thread There is often much confusion on SOL, restarting SOL, and the 7-year/ 7.5-year rule for reporting. Hopefully, this thread can be of some help and answer some of your questions. I will discuss SOL and Credit Reporting separately, so some of your questions not answered in the first part may be answered in the second. This info in this thread is generally aimed at credit card debt, but the basics may apply to other debts. If there is anything I missed please feel free to add to the thread and if you find that I made a mistake, please let us know and please try to provide information (sources) about the correction, if possible. Statute of Limitations Sol (Statute of Limitations) - This refers to the amount of time a creditor or debt collector has to legally sue you for the debt. The SOL starts from the month of the Date of First Delinquency (DOFD) (usually a 30 date late) that leads to the charge-off (CO) of the account. The SOL varies from state to state and varies by type of debt. The Terms and Conditions of agreements and some state’s Tolling laws can also affect the SOL. The SOL does not refer to the amount of time something can stay on your reports. We’ll discuss reporting timelines later on. Can the SOL change? Yes. The SOL can change if you have made a payment towards the debt or if you agreed to a payment plan (usually in writing). This can very by state and is too detailed for this thread. Can a debt owner sue me after the SOL has past? Yes, but it’s unlawful. If a creditor or debt collector sues you after the SOL has past, you can go to court and use the SOL as a affirmative defense in that case. You may also hear the term “Time-Barred” when it comes to using the SOL affirmative defense. A creditor or debt collector can still sue you and obtain a judgment against you after SOL, if you do not show up in court and present your defense. There are ways to fight that but we will not discuss that here. You should always consider contacting an attorney if you have been sued before or after SOL. Per the CFPB: “It's against the law for a collector to sue you or threaten to sue you on a time-barred debt. If you think a collector has broken the law, file a complaint with the FTC and your state Attorney General, and consider talking to an attorney about bringing your own private action against the collector for violating the FDCPA.” https://www.consumer.ftc.gov/articles/0117-time-barred-debts You can read more about Time-Barred, Tolling, SOL and resetting SOL here: http://www.nolo.com/legal-encyclopedia/time-barred-debts-when-collectors-29805-2.html How to respond to a lawsuit that has been filed beyond SOL for credit card debt (open accounts): http://whychat.5u.com/answer.html Debt collection laws by state: https://www.privacyrights.org/fs/fs27plus.htm Does the furnisher of information to the credit reporting agencies (CRA) have to delete a Tradeline (TL) when the SOL runs out? No. If the TL is within the FCRA reporting statutes, but past the SOL, it can still remain on your credit reports. We’ll discuss this more later. Will paying a debt that is past the SOL improve my credit score or remove the negative information from my reports? Probably not and no (but keep reading). The SOL does not have any affect on the way a TL is reported on your credit reports. Paying a debt after an SOL has passed can often make your credit score drop because you have made the TL activity more recent. In other words, it makes the negative information appear more recent. The only way to ensure that negative information is removed from your reports after SOL has passed is by negotiating it’s removal by both parties agreeing to a Pay-for-Delete (PFD); by waiting for the TL to fall off your reports; or if the information is being reported incorrectly and you successfully dispute it. If your PFD is not in writing, then consider that you don’t have an actual agreement for it to be removed. Never pay a debt after SOL without this agreement and try to also negotiate for this if you pay before the SOL has past. Credit Reporting Credit reporting statutes (what can be reported on your credit reports and for how long) is determined by the Fair Credit Reporting Act (FCRA). How long can negative information related to a Charge Off (CO) be reported on my credit reports? To help answer this let’s first look at part of the FCRA, which can be found at this link starting on page 29 section 605: http://www.miller-law.net/pdfs/FCRA.pdf © Running of reporting period (1) In general - The 7-year period referred to in paragraphs (4) and (6) of subsection (a) of this section shall begin, with respect to any delinquent account that is placed for collection (internally or by referral to a third party, whichever is earlier), charged to profit and loss, or subjected to any similar action, upon the expiration of the 180-day period beginning on the date of the commencement of the delinquency which immediately preceded the collection activity, charge to profit and loss, or similar action. What this means is that negative information that lead led to a charge off (the 30-180 day lates) can be reported for 7.5 years and the charge off can be reported for a maximum of 7 years. This is why you hear about the 7-year and the 7.5 year debate. Read this for more detailed information: http://consumercreditwatch.wordpress.com/2012/09/28/fcra-time-limitations/ Let me provide a detailed example that will attempt to put all of this together for you. It may help if you write down dates and events on paper to get a clear picture. This example involves a charged off credit card debt for someone living in California, where the SOL for open accounts is 4 years. Say you opened a credit card in Jan 2008 and your first missed payment (30 day late) was reported Jan 2010 (in other words your last payment was made in December and a 30 day late appeared on your reports in Jan). You never made another payment and the card was charged off in June 2010 (about 180 days later). Your date of first delinquency would be Jan 2010 and that can't change. Since the SOL (to file suit) for California is 4 years, the OC or the CA has until Jan 2014 to be able to file suit to force you to pay. Let's say the OC sold the debt to a CA in Jan 2012, the CA is still bound by the same SOL as the OC as long as you haven’t made a payment or entered an agreement to pay. If the CA doesn't sue you before Jan 2014, then they can't legally sue you for it, BUT they can still report it and try to collect from you. The CA can still report a balance and the trade line until June 2017, which is 7.5 years after the DOFD. The OC can also still report the trade line, with a zero balance if sold to the CA, until June 2017. (I’ll go over this again after this example.) Just because the CA bought the debt in Jan 2012 doesn't mean that the SOL has been reset and they have 4 years from the day they bought it to sue you. They still only have until Jan 2014 to legally sue. Just because they bought it on Jan 2012 doesn't mean that they can report it for 7.5 years from that date. They are still bound by the reporting limit of 7.5 years from the original DOFD of Jan 2010. If a CA, OC or CRA were to continue to report it after June 2017, you could sue them for FCRA violations. If the CA bought the debt in Jan 2012, as mentioned earlier, and in Jan 2013 you made a payment to them for the debt (even $1), agreed to a payment plan, or you agreed that the debt is yours; then you could have reset the SOL. If your actions reset the SOL, it would mean that they now have until Jan 2017 (a new 4 years). The new 4 years starts on the day you made the payment or agreement to pay (again this can vary by law and what may have caused the Sol to restart). Even if this happens, they can't continue to report the debt past the original DOFD, which is still June 2017. Can the SOL extend beyond the reporting period allowed for a charge off? Yes. One reason is that your state has a longer SOL than the 7.5-year reporting period. Some examples are: Montana (8), Wyoming (8), Iowa (10), and West Virginia (10); however, this could vary according to the card agreement and case law for that state. More info on credit card SOL by state: http://www.creditcards.com/credit-card-news/credit-card-state-statute-limitations-1282.php Another reason is in this example: Don’t read this part if you don’t understand the example above because it may confuse you further. Just to throw a wrench into the mix, it is possible to extend the SOL so it goes past the allowed reporting period of 7.5 years. How? If you agreed to a payment plan as a resident of California say at the 3 year-11 month mark, and paid on it for 6 months, you could be potentially be sued after the 7.5 year reporting date because you reset the SOL to the month of your last payment under the payment plan agreement. Even though you may have extended the SOL they still can’t report the CO after the 7.5 mark from the original DOFD. If you’re sued after this reporting period has passed, but within SOL, they can place a judgment on your report, if awarded by the court. Judgments have their own reporting guidelines. So the thing to take from this is that you can be sued for something that is no longer being reported on your credit reports and the last payment made in a repayment plan (if you didn’t complete the plan) restarts the SOL at the month of the last payment. Can the DOFD change? No. Even if a debt is sold to a collection agency (CA) or a junk debt buyer (JDB) the DOFD from a CO does not ever change. Can the DOFD change if I make a payment on the debt? No. Again, once the DOFD is set, it can’t be changed by the OC, a CA, or a JDB. Paying on a debt effects the SOL, not the DOFD of a charge off. Can a CA and the OC both report negative information about the same tradeline? Yes. What varies is how it’s reported. If an OC has assigned a debt to a CA, either in-house or third party, both the CA and the OC can report the TL and both can report a balance. Why? Because the OC did not sell the debt to the CA, the CA is working to collect on behalf of the OC and not themselves, although they make money off of the collection. The amounts reported by each in this situation can be different because the OC can only report the original CO amount and the CA can report the CO amount, as well as fees and interest. If the OC sold the debt to the CA, the OC must report a zero ($0 or blank) balance and can continue to report until the 7.5-year mark from the DOFD. Once sold by the OC, the Sol no longer applies to the OC TL but can still apply to the CAs right to sue. Once a debt is sold, the OC is completely out of the picture. Can I get a negative TL removed before the end of the 7.5-year reporting period? Potentially. There may be several ways but the main one I will discuss is an Obsolete dispute. An obsolete dispute can be attempted up to 6 months before the expected fall-off date; however, they are usually more successful about 2-3 months before that date. This type of dispute can be successful because the CRAs don’t want to be caught reporting a TL past the 7.5-year mark, which is a violation of the FCRA. They would rather delete than risk going over that mark just in case the furnisher made an error in the date. This is not everything you need to know about SOL and FCRA reporting guidelines but it should get you started.
New Legislation to Provide Free FICO Score to Consumers
bravegirl posted a topic in Credit ForumI just ran across this last night and it got me a little excited! (http://goo.gl/U00YRg) A new bill was introduced to the Senate on April 9th that, if passed, will ensure Consumers receive a free credit score once per year. A Vantage score? a FICO score? - This is a quote from Senator Schatz's press release: “The bottom line is that everyone applying for a loan should be able to see the same information that banks rely on to judge whether a consumer is creditworthy.” The S.E.C.U.R.E Act of 2014 will provide greater accuracy and accountability from the credit reporting industry. It will also give consumers the ability to ask a court to order credit bureaus to fix an inaccurate credit report. The bill would also provide consumers free annual access to an actual score that is used by lenders to make credit decisions - http://www.nclc.org/images/pdf/credit_reports/pr-schatz-brown-credit-reporting.pdf Here's a link to the press release from Senator Schatz's site: http://goo.gl/WIXntm I stronlgy urge everyone who uses CBs to contact their senators and demand that they vote yes on S.2224, the Stop Errors in Credit Use and Reporting (SECURE) Act of 2014 Here's a link to the contact page for members of the Senate: http://www.senate.gov/general/contact_information/senators_cfm.cfm -Bravegirl
Never Late on Student Loand- Credit shows otherwise
tlamb1924 posted a topic in Student LoansHi, Im still in school and my student loans- Which Originated with Wells fargo and has been transferred serveral times- Are currently listed with PAST DUE 90 days!! HOW CAN THIS BE? I need assistance on how to effectiviely dispute these past due items because they're having a negative effect on my scores. HELP
I think I got the title wrong but I don't know how to edit it, it should read: First day of default being reported as first day of delinquency I have 3 loans with Department of Education, originally they were Direct Loans in 2007, now they are called Direct Stafford Subsidized. I have consolidated them last year, they show "paid collection" as of now. Also, these 3 loans share the same first day of delinquency since I never paid for them once they got out of forbearance initially (other than through tax offset). Now, the problem with the first day of delinquency. I am waiting for these loans to fall off this year and I found an error that will prolong them further than they must stay on. When I go to the nslds.ed.gov to view my loans, even the past paid ones, I can see detailed info of each loan. The details say REPAYMENT started on 7/2007 and then DEFAULTED 5/2008. However, on all credit reports it says that first day of delinquency is 5/2008. Correct me if I am wrong, but first day of delinquency is not equal to first day of default, right? Especially that non-educational institutions have 120 days before it becomes a default, I think. But here it is 270 days difference that pushed my hopes and dreams of having a clean report by another 9 months. Unbearable! I have already waited for a while... I can see that the first day of default was calculated correctly (see image below): Per Higher Education Act of 1965 Sec. 435(i) it says that the loan becomes in default after 270 days since non-payment, that is ~9 months. So, if the due date is on or about 07/2007 and the first day of delinquency would be 30 days late (I am reaching here), about on 08/2007, I'd say. Then add 9 months and you get about 05/2008. Sure, it is possible I fudge the numbers, let me know if I am, just my line of reasoning. If I am incorrect, please let me know. This is a screen show for one of the 3 loans, others are the same date wise, just $$$ differs. Point is, something is up and it might be affecting you too, do check! Instead of these negatives falling off this year, because of incorrect reporting it is being pushed up another 9 months for no good reason. I called Dept. of Edu. today, people I spoke to have said that they have no idea who is reporting it internally, evidently Direct Loans were distributed to many different sub-departments within the Dept. of Edu (once Direct Loans ceased to exist). However, the people I spoke to did see that the first day of delinquency is set at 5/2008 in the system, they don't care why or who set it. They are unwilling to change, say they cannot do that even if they wanted. All they could advise me was to stop tying their phone lines and start disputing this info with the credit agencies. So, I did with all 3 credit agencies, sent them all a fax with a letter, included my math (hope it is solid), and printouts from the website that show dates I am falling back to as my proof. Well, what are your thoughts on the subject?
Ratios and Reporting Question
kmpublishing2 posted a topic in MortgagesHello all, I have a question that hopefully someone here can answer. I have a mortgage pre-approval (and am scheduled to close December 26th), but my ratios are really tight. I know I can't let anything new report balances on my credit report, and have been trying really hard to pay my cards off before the statement cuts...but I missed two. They were small balances, but they would be adding about $65 in monthly payments to my numbers, which I believe could skew my ratios just enough to get me in trouble. The two cards that reported were Merrick and WalMart. Do you think, since I have since paid them off, that I could call each of them and request that they update the balance before my next statement date? Has anyone done that? A rapid rescore would not apply here, would it, since they will not have reported the new $0 balances? The statement dates are the 27th and 28th, which is too late-- I don't want this messing up my mortgage!
funkiehouse posted a topic in Credit ForumCan a company that bought a CO debt from the original creditor also report the trade line as a CO if they sold the debt to another company? Or can they even report a CO in the first place, if they bought (acquired) the debt, meaning that they are now a debt collector? From my understanding only an OC can report a charge off. If that's correct, what section of the FRCA would it violate by reporting it as such, if any? Or is there a better violation in the FDCPA that would cover the reporting of a CO? I've been reading but haven't really found anything that is clear. Any sections you could direct me to would be helpful. Here's more info if your wondering what the heck I'm talking about. I'm preparing my CFPB complaint. http://creditboards.com/forums/index.php?showtopic=520530&hl= Thanks
Should credit scores include rent and cable bills?
Misty120 posted a topic in Credit Forumhttp://www.marketwatch.com/story/should-credit-scores-include-rent-and-cable-bills-2013-10-21
And yet another reason why Pro Se litigators need to do thier homework or hire it out... NEVRIK BERBERYAN v. ASSET ACCEPTANCE, LLC Case No. CV 12-4417-CAS (PLAx). United States District Court, C.D. California. March 18, 2013. Ashley Fickel, Attorneys Present for Defendants. My highlights: ____ In opposition, plaintiff argues that defendant "communicated" with her through its alleged reporting of a debt that appeared on her credit report, but plaintiff offers no authority that supports such an expansive reading of the term "communicated." Opp'n at 6. Defendant must do something more than allegedly place notice of a disputed debt on plaintiff's credit report to trigger its disclosure duties. And even if such disclosure duties were triggered by plaintiff's letter that disputed defendant's right to collect on any debt, see 15 U.S.C. § 1692g(, plaintiff has not alleged that defendant was engaged in any "collection activities" at the time of her letter. Furthermore, plaintiff fails to allege that defendants employed any cognizable "deceptive means" in connection with the collection of any debt; there are no allegations that defendant committed any deceptive actions, other than reporting a debt to a CRA. Id. Because plaintiff alleges facts that demonstrate that defendant did not violate the Act, bare recitals of the elements of a claim under the FDCPA are not sufficient to survive defendant's motion to dismiss. In support of her claims, plaintiff alleges that defendant violated section 1681s-2( (1) by "failing to conduct a proper investigation," after receiving notice from a CRA that plaintiff disputed the information in her report. FAC ¶ 31. Had defendants conducted such an investigation, plaintiff alleges that defendant would have realized they "could not collect upon [her] account." Id. Indeed, without offering "proof of the right to collect upon [a] debt" before allegedly verifying that debt for a CRA, plaintiff contends that defendant violated the FCRA. Id. ¶ 30. The Court concludes that plaintiff fails to state a claim under the FCRA. Plaintiff fails to offer any factual allegations supporting her contention that defendant's investigation of her disputed account was unreasonable. First, there is no duty on the part of the furnisher to provide proof of its right to collect upon a debt under the plain language section 1681s-2( . As plaintiff herself alleges, she received confirmation from the CRAs that Asset had verified the account appearing on her credit report as valid. FAC ¶ 16. Plaintiff cannot attempt to impose a further requirement of "validation" in section 1681s-2( , above and beyond that of "reasonable investigation," where none exists
Firt time posting, hopefully it's in the correct forum. I successfully settled a HELOC loan with USAA in Oct 2012. We were never late on payments, but we were underwater in terms of the value of the home. So we reached out to USAA with a letter to settle the debt. Thinking that we could pay them less than what we owed and settle the debt and no longer owe the remaining amount. As well as releasing the lien so we could someday possibly sell the house without the 2nd mortgage hanging over us. Home Value = 175k 1st mortgage = 205k USAA 2nd Mortgage = 60k We paid 27k Unbaid balance was 33k We started out by offering them 10k and eventually agreed on 27k. Thinking that were doing the right thing as well as eliminating some debt. The letter we signed stated the following: "USAA Federal Savings Bank reviewed the request for a settlement in full on the above referenced property. USAA believes it is in its best interest to accept the offer of $27,210.69 as settlement in full and agrees to release its lien once $27,210.69 in certified funds have been received and apphed to USAA Home Equity loan number xxxxxxxxxxxx" When we checked our credit report on the 3 credit bureaus. The loan shows up as a charge-off/never late (See below) Status: Account charged off/Never late. $33,202 written off. $33,202 past due as of Oct 2012. But we also have 33k showing up as a balance we still owe. This was not what intended. And of course smack me now, we did not consult an attorney before proceeding. The signed agreement above did not raise any red flags for us. Is there anything we can do to fix / correct / dispute the way this shows up on our credit report? If you need more details to help answer, just let me know. I'm glad I finally found a forum to talk with others in similar situations. EDITED: (This was also the last counter-offer we received from USAA, before we accepted, again the verbiage gave us a different impression of the outcome) USAA Federal Savings Bank has completed the review of the Short Sale package submitted to our office. We wish to thank you for the opportunity to have served you. However, at this time, USAA FSB will not be able to accept the offer of $21,130.71 to settle this account in full and release the lien on the above-referenced property. However, we will accept 45% of the loan balance at closing to settle in full and release the lien. The current balance of the loan as of today is $60,207.63 with a per diem of $3.94. There are other terms we need to discuss so if this counter is acceptable, contact our office for further instruction as this document is not a final approval letter. This offer expires on November 7, 2012
CFPB Proposes to Regulate Non-Bank Student Loan Servicers
hrguy posted a topic in Credit Forumhttp://www.cutimes.com/2013/03/14/cfpb-proposes-to-regulate-non-bank-student-loan-se?eNL=513a5923150ba0942600011c&utm_source=Daily&utm_medium=eNL&utm_campaign=CUT_eNLs&_LID=137763512