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Derogatory Tradeline Confusion

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Neighbor whose wife has the math skills of a monkey has a credit card charge-off and asking me questions about who owns what tradelines and how long they will remain.  Specifically:


1.  If bank hires a CA, both bank and CA can report, right?  Does bank have to report $0 balance?


2.  If CA can not verify debt, can they still report?


3.  If you tell CA to FOAD, can they still report?


4.  If bank sells debt to JDB, can bank still report?  $0 balance?  


5.  If bank hires CA and CA obtains judgment, other than the judgment itself, who reports and what balance does each report?

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#1 If a bank sells the account to a collection agency, the bank then has to report 0 balance to allow the collection agency to report a balance.

#2 Verification is not required for a collection agency to report.

#3 Yes

#4 Yes and it should be a $0 balance

#5 Bank reports $0 balance; Collection Agency reports whatever balance they originated.  Judgment reports to your credit file(s) for the judgment amount from the furnisher the credit reporting agency pays to obtain the data.



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One thing that can muddy the waters on reporting is whether a DETAILED and SPECIFIC response is done on the initial 30-day notice.  Some jurisdictions treat reporting AS a form of collection activity.  Generic tripe will not preserve the rights of the consumer which is why specificity is essential to the efforts to keep the third-party OFF of the report.  This factors into WHY, as an example, the Texas plan works so well for consumers in THIS State who follow the plan instead of firing off cut-and-paste garbage...

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Whatever your specific response is, the 9th and 4th Circuit have already held that verification is pretty much a joke.  All the CA has to do is say they have verified the debt and that Joe Cool at 123 Main Street owes us $100 from a debt formerly with Chase.  

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