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motley6

Sleeping Dogs and New Credit

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I have about $15K in charge-offs where the DOFD are all a little over a year old.  Amounts vary between $500 and $5K.  I'm aware that disputing tradelines within the SOL (Texas for me) will awake the sleeping dogs, and I plan on leaving those alone.  My question is regarding getting new credit, for example an Open Sky Secured Card with no credit check.  Would this new tradeline (or another e.g., a possible car loan later this year) trigger litigation?

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Whether the apps for new credit trigger litigation will depend much on who you walked debt on.  However, that being said, being in Texas somewhat reduces the probability of litigation.  This is because of the simple fact that post-judgment remedies are almost non-existent in this State...no wage garnishment and the inability to levy bank accounts substantially hinders the holder of the judgment.  This does not mean that litigation never takes place, just that the risk is substantially reduced. 

 

What you WILL see is a substantial uptick in the collection activity because of the trigger alerts that many entities subscribe to and that kick in when there is a new inquiry. 

 

With fresh charge-offs, however, you also need to be aware that even a secured card is NOT a sure thing.  The issuer is not going to be certain that they won't have to defend their position with respect to the funds you place on deposit for the card.  As such, when you are at risk of litigation, you are not guaranteed of a secured card being approved. 

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