Any collection agents out there? I have a question.?

Question

My sister-in-law had an account that went to collections in 2004. She fought and debated with them for 3 years, now they're threatening to put it on her credit. I told her that they may show the original 2004 collection date instead of showing it as a new collection. She's concerned that it will show as a new collection instead of one that's already 3 years old. She says the statue of limitations is 5 years in her state, so she's thinking that if they show the 2004 date (when it was originally placed for collection), that she'll have a better chance of it being off sooner. I may have given her incorrect information. Anyone have any input? Thanks.

Answer 1

She has been fighting this for 3 years and NOW they are going to put it on her credit. That seems very strange, a collection agency will not usually hold off 3 years to do this.

Now, she also has some dates mixed up. The Statute of Limitations is the time that a creditor can file a suit against her. This time varies from state to state and starts from the date of the last delinquency, or in some cases could be reset if she made a written promise to pay. This is NOT the same as the credit reporting period. The credit reporting period is the amount of time that the negative information will be on your credit report. That is 7 years from the date of the first delinquency. Unlike the SOL the reporting period is determined by the Fair Credit Reporting Act(FCRA), this time is the same in all states, and can not be reaged.

So if her first date of delinquency was in 2004 and the SOL in her state is 5 years she could be sued up to 2009. Regardless of the SOL the collection will remain on her report until 2011.

Answer 2

People often confuse the Statute of Limitations and the reporting period. They are two completely different things.

The reporting period for a negative item to be on your credit report is 7-1/2 years from the default date. NOTHING re-starts this period. This is based on the FCRA.

The default date is probably before the date it went to collections. The collector can list it on her report now (I'm surprised it isn't there already), but it will still fall off in another 4 years.

The Statute of Limitations (SOL) is the time frame to bring a lawsuit. This varies from state to state. The clock starts at the last transaction or payment date. Making a payment re-starts the clock. In some states, agreeing to make payment or even acknowledging the debt can re-start the clock. If the collector sues and the debt is beyond the SOL, you can use this as an affirmative defense in court. If you don't show up, the collector can still get a default judgment for the debt.

Answer 3

The statue is 7 yrs in any state. As far as reporting it to the credit when the account is turned over to a 3rd party agency is when the new company will report. Original creditor shows up as an R9 on the credit report meaning it was charged off as a bad debt. Bad thing about that is collection agencys continue to sell the account so new company will report new collection account each time...I have worked in the collections industry now for 7 yrs. She can alway dispute with the credit reporting agency.

Answer 4

Lemme tell you something....I have Yahoo pestering me because I make fun of terrible answers.

You asked for collection agents to respond, and I KNEW they would give the wrong answer....and sure enough that is what happened. Now I can just ignore this and keep Yahoo off my case...or I can correct their answer and risk it.

For starters, OC is, as usual, the only correct answer.

Selling your debt to another collection agency does NOT restart the SOL or credit reporting period.

Promising to pay a debt does NOT restart a SOL unless this was done in writing.

The SOL begins on the date of the last transaction or charge...NOT the delinquency date, NOT the charge off date.

If you read the link below, the site does a very good job at explaining what the SOL and credit reporting periods are. Please take a few minutes to read it, and you will see what I mean about collection agencies lying all the time.

Now what do you do?

You can count of the collection agency placing this on your credit report, and they WILL place this with the wrong date. Remember, I said the credit reporting period is the DELINQUENCY date. It must be removed automatically from your credit report after 7 years (NOT 7 1/2 years as bdancer says). Again, read the links below, as it shows the actual law. I don't understand why people keep saying 7 1/2 years, especailly since I've posted this information dozens of times already.

Now, when they post this, and the info is incorrect, send a dispute letter to the credit reporting bureau, plus a "demand to validate" letter to the collection agency. Read the FCRA laws....follow their procedure exactly. If this date is not corrected within 30 days, you can then sue them in small claims court (very easy to do) and win $1000 for your troubles.

I know, I've helped (to date) 39 people do the same thing.

I am not a lawyer or credit counselor...but feel free to contact me if you need more advice on this.
Source(s)
Commission paper
http://www.ftc.gov/os/statutes/fcra/john...

605(c)(1) and 605(a)(4)

§ 605. Requirements relating to information contained in consumer reports [15 U.S.C. § 1681c]

(a) Information excluded from consumer reports. Except as authorized under subsection (b) of this section, no consumer reporting agency may make any consumer report containing any of the following items of information:
(4) Accounts placed for collection or charged to profit and loss which antedate the report by more than seven years.(1)

(c) Running of reporting period.

(1) In general. The 7-year period referred to in paragraphs (4) and (6)(2) of subsection (a) 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.

http://www.carreonandassociates.com/arti...

Answer 5

Hi...I am not a collections agent however I am a Mortgage Consultant and deal with this issue with my clients. If your sister in law called up the creditor and admiited to owing the debt then that will restart the status of limitations over on her credit report. If the account was older then 3 years she should not have called the creditor because it would have fell off the credit report in 2 more years. However, since she did call what she can do is recall the creditor and let them know that once the debt is settled to have the creditor mark the debt as paid and that way it won't negatively affect her credit score.

Answer 6

It sounds to me that your s-i-l don't know if its already on her credit report. Why don't you find that out first. Usually if something has already gone into collection, it has already been reported. The collection company may just be 'working' because they know you don't know if it is or not.

If it has already been reported then any new negotiations may cause a more recent date to be reported.