If a charge off stays on a credit report 7 yrs then disappears what happens if one never pays the debt?

Question

Am I right? does this debt evaporate from a credit report completely ? And if there is only two years left on the calender until the 7 years is up , what is my incentive to pay the debt other than my own good consience if I'm in no need of new credit?

Answer 1

Much of what happens to the debt depends on the statute of limitations (SOL) for collection in your state.

If you are still within the collecting SOL, they can actively persue payment. Which includes possibly suing.
If you are to be out of the collecting SOL, a collector (CA) or the original creditor (OC) can still actively persue payment but cannot legally sue. (even though it is illegal to sue on a time barred debt, they still do it)

A CA can try to collect basically forever unless you let them know, in writing, that the debt is time barred and to cease all contact with you. (a full cease & desist is not recommended while still within the collecting SOL)

A credit card charge off will remain on your reports for 7 years from the first time you became 30 days late and never brought the account current leading to the charge off, no matter if it is the OC or the CA (or both) who is reporting.
(If it remains on your reports for the full 7 years keep a close eye on it for re-aging)

If both the OC and a CA are reporting the same debt, the OC "must" show the account with a zero balance.

If it is reporting correctly theres not much you can do about it. If it is reporting incorrectly you can dispute it and legally they would either have to correct it or delete - sometimes the data furnisher (OC/CA) will just verify the inaccuracies and you would have to fight the CRA's and the data furnishers to comply with the FCRA.

A paid negative is no better than an unpaid negative.
If you plan on paying be sure to send the CA a debt validation letter, then after they validate (ha, like that would happen) send a pay for delete letter demanding, among other things, that they delete any negatives tradelines they have placed on your credit reports.

If it is still with the OC, you can request debt verification, though they don't have to respond unless your state holds OC's the same as CA's, and then request pay for delete.

When the charge off reaches the 7 year mark and falls off on it's own, it will remain "in" the CRA system but no one will see it unless they pull a full factual report. Full factuals are very rarely pulled so it's really not much of a worry.

Answer 2

Two years is enough time for them to take you to court if the amount is worth the legal fees. If a ruling is not in your favor, you could end up paying their legal fees.
Financial debt is suppose to come off of your credit report in 7 years. In order to have the delinquent debt removed, you may have to provide some verification that the debt has been paid. The 7 year limit is generally held up in court: removed or not.
If you've had a debt go to collection agencies, when you pay it, be sure to get documentation WHEN IT"S PAID, and don't throw it out. Three times I have had to track down cashed checks from years back to prove to another collection agency (just before the 7 year limitation), that the debt was paid years ago. It's frustrating and they can be very intimidating when they are trying to 'double-dip' payment on a debt.

Answer 3

If you never pay off the debt, and the company doesn't pursue you in civil court to garnish your wages or collect collateral property, the company has the option to place your account on profit and loss. Your credit report will reflect you no longer owe the company anything. But in other sections of your credit report the P&L will show up and that will affect your number rating that is now being used. Good credit is almost needed as an ID card. But if you only pay cash for all your goods, then eh, why bother.

Answer 4

What is your incentive? Other than improving your credit?

You are ALWAYS going to need better credit. They can hunt you down for those debts. Just pay it off and get on with life.

Answer 5

It also falls off. You may have to write a letter to your credit reporting agency, but yes, it also comes off.
In 7 years, checks come off in 5.

Answer 6

It will go away after it has been paid. Make sense, it is still going ,so it will still be seven years later. It can't be seven years later if the collection is still open. Plus you have something called integrity. If youowe it, pay it. It is simple.

Answer 7

It is supposed to go away after seven years..but bad credit never goes away...If you have no need for new credit then you answered your own question.