topic Re: SOL versus 7.5 Years in General Credit Topics

SOL versus 7.5 Years

Noah_Bodie — Thu, 06 Sep 2007 04:31:12 GMT

Yet again, the SOL issue has created confusion. This happens a lot, and it is NOT an easy subject to get one's head around right away.

There are actually two separate and distinct issues involved. SOL (Statute Of Limitations) and CRTP (Credit Reporting Time Periods). I think I'm going to try and coin that phrase and begin using it.

CRTP

Tuscani has written up a great thread on CRTP.
http://ficoforums.myfico.com/fico/board/message?board.id=generalcredit&thread.id=2689

CRTP is the length of time something can be reported to the CRAs. Once the CRTP expires, it's gone from your CRs.

For most things it's 7 years, give or take 180 days. I say give or take because there's an FTC staff opinion letter (I believe) and a court case or two (I think) that have weighed in on this issue. I have tried to read thru and follow it over on CIC, but I get lost, my head hurts counting up legal precedent, and I'm left with the conclusion bad stuff can report, letter of the law, caselaw accounted for, 7.5 years from the DOFD--Date Of First Delinquency, which is usually when it went 120 days late.

For BK7, it's 10 years from discharge. For BK13, I think it's 7 years from filing.

Inquires stay for 2 years and aren't supposed to hurt you after 1 year. Soft inquiries don't hurt at all. For another head popping reading assignment, go here for more inquiry stuff.
http://ficoforums.myfico.com/fico/board/message?board.id=generalcredit&message.id=14932

Child support, judgments, liens, etc. the wackiness only worsens. The FCRA leaves open a lot of room for states to permit judgments to be extended, in some states all but indefinitely, and they won't drop until 7 years from PIF.

By and large once the CRTP is set, that's it. It's set. When it passes, the adverse info is gone. An OC can sell a debt to a CA, who sells it to another CA, who sells it to a third CA, who sells it to a JDB, and so. CRTP remains set. If it's a judgment or lien or something in the wacky areas, it might be a different story. But if we're talking lates, chargeoffs, collections, repos, BK, then the CRTP gets set and remains set. Period.

OK, that concludes the part that deals with your credit reports.

SOL

Statute Of Limitations. Here is some starter reading on SOL.
http://ficoforums.myfico.com/fico/board/message?board.id=generalcredit&thread.id=8713

SOL is the length of time in which a creditor may sue you over a delinquent debt. If you look in your state statutes, you'll find SOL for all kinds of things. Some states you might find SOLs for 1 year, 2 years, 3 years, 5 years, 6 years, 10 years and 20 years. Some might involve real estate. Some might involve wrongful death. Some might involve personal injury from assault or vehicle accidents. There is probably a state out there, somewhere, with an SOL specific for damage to your crops when caused by a neighbor's dog.

SOL is a broad subject, and finding the details in the statutes about what SOLs apply to debt can take some doing. You may have to read the statutes, regulations, caselaw, AG opinions, and probably something else.

Within debt and credit, there are at least 4 broad categories into which the specific debt may fit for purposes of SOL. Written, Oral, Promissory, and Open. Open generally includes CC debts, but not always. This bankrate link is a good start, but I know there are things listed which are very much in dispute.
http://www.bankrate.com/brm/news/cc/20040116b2.asp?caret=8

For example, the Kentucky AG has said, in response to consumers requests, there is caselaw in Kentucky saying the SOL on CC debt is either 5 or 15 years. Some cases in some courts have ruled 5 years. Others have ruled 15 years. Unless and until the legislature makes a law change to more narrowly focus the language in the statutes, this uncertainty will remain. The matter might also get decided by a higher court in a case before the court. State or federal? Could be one or the other. Might start in the state courts and get bumped into the federal courts. SCOTUS would get the final say, if it ever got that far and they granted cert. Even then, the legislature could come back with a law change, and if that language were sufficiently vague, the fun might begin yet again.

Here in Washington state, 3 years or 6 years SOL for CC debt is also in question. In Georgia, CC SOL might be 4 years or it might be 6 years. Same fun as Kentucky. Different State Supreme Courts and Federal Circuit Courts.

Unlike CRTP, SOL can be either tolled or reset.

Tolling is when the SOL is placed on hold, and this can happen for a variety of reasons. For example, let's say you flee the country, live overseas for 20 years, then return. SOL picks up where it left off 20 years ago. Or if you go into hiding or concealment. Exactly what constitutes hiding or concealment? Anyone's guess. Probably a whole mess of caselaw and lawyers who can tell you about such things, if you've got the time and money to hear about it.

Resetting the SOL is when it starts all over. Generally speaking, in most states any payment or partial payment on a debt resets the SOL. Not all, but most. This is also something which gets buried in the statutes, caselaw, AG opinions, etc.

Let's say to get a CA off your back, you settle and pay $1200 on an old $3000 debt. 2 years passes, it drops from your CRs, and you rejoice. Then you get served with a summons and complaint. You get sued. Why? Well, for that $1800 you still owe, plus another $4179.83 in penalties, fees, interest, etc. Can they do that? Well, after checking, the SOL in your state is 4 years, you paid $1200 2 years ago, so yep they can sue you. The $4179.83 may or may not be able to get tacked on, but if they can prove the $1800 debt they can collect on it. If they win, and get a judgment, that judgment will get reported, and you have a bad TL on your CRs all over again--perhaps for another 7 years after it's paid.

One final complication with SOL. Since it varies by state, which state's SOL applies? Well, the FCRA helps narrow it down, to one of two states. FCRA says you can only be sued in the state where you live now or the state where the debt was incurred. If you now live in Arizona, but lived in California when you first got your CC that's in default, then either the Arizona or California SOL would apply. Doesn't matter that's it BOA and their HQ is in North Carolina. The OC or CA has to sue you in either Arizona or California. Practically speaking, they are going to sue you in the state where you live now. I have yet to hear of anyone being sued over a debt in a state other than where they now live, but it's probably happened. However, the SOL may be either California or Arizona SOL. There is a difference of opinion amongst lawyers, judges, AGs, etc. which would apply. In theory, a California SOL might apply even though the suit is brought in Arizona.

Conclusion

Always remember that SOL and CRTP are two entirely different, distinct and separate things.

Message Edited by Noah_Bodie on 09-05-2007 09:31 PM

Re: SOL versus 7.5 Years

smallfry — Thu, 28 Jun 2007 02:19:43 GMT

BK 7 is 7 years from the filing date not the discharge date.

Re: SOL versus 7.5 Years

masdeocho — Thu, 28 Jun 2007 19:56:58 GMT

Great post. I'm glad you clarified that you made up the acronym CRTP because I've seen it in other threads and didn't know exactly what it meant and where it came from. :smileyhappy:

Re: SOL versus 7.5 Years

Noah_Bodie — Thu, 28 Jun 2007 21:13:40 GMT

smallfry wrote:
BK 7 is 7 years from the filing date not the discharge date.

http://caselaw.lp.findlaw.com/scripts/ts_search.pl?title=15&sec=1681c

15 USC 1681c(a)(1)

Cases under title 11 or under the Bankruptcy Act that, from the date of entry of the order for relief or the date of adjudication, as the case may be, antedate the report by more than 10 years.

FCRA doesn't distinguish. 10 years for all. However, the CRAs will report a BK7 for the full 10 years, but a BK13 for only 7 years. However, EQ is said to report BK13s for the full 10 years.

CRAs are also said to use the filing date for BK13, but the discharge date for BK7. I suppose the reasoning is that with a BK7, until the BK court approves your filing and discharges the debt, it ain't a done deal. With BK13, filing starts you down the path to repayment and that takes a couple of years.

Practically speaking, if the CRAs reported BK13s for the full 10 years and used the discharge date, no one would file BK13. With BK7, they are looking to punish you to the full extent of the law.

Re: SOL versus 7.5 Years

masdeocho — Thu, 28 Jun 2007 21:22:39 GMT

How long is it (on average) between filing date and discharge date for a BK7?

Re: SOL versus 7.5 Years

smallfry — Thu, 28 Jun 2007 21:24:34 GMT

Varies I'm sure. Mine is 4 months. According to my reports, all 3, the BK7 falls of 10 years from the filing date not the discharge date. Others have told me that as well.

Re: SOL versus 7.5 Years

Noah_Bodie — Thu, 28 Jun 2007 22:19:31 GMT

4 months sounds about right as a good average.

Re: SOL versus 7.5 Years

wendy125 — Tue, 07 Aug 2007 12:59:19 GMT

Hi,

I was informed, when claiming that a judgement had gone past the 7, now 10, years that, if you make contact and pay on the account, the time starts from that date, no longer the original. Has anyone else ever heard of this? I'd be interested to learn if I was being misled.

Re: SOL versus 7.5 Years

MidnightVoice — Tue, 07 Aug 2007 13:04:40 GMT

Noah_Bodie wrote:
, 7.5 years from the DOFD--Date Of First Delinquency, which is usually when it went 120 days late.

What happens if it was never 120 days late?

Re: SOL versus 7.5 Years

daytona18 — Tue, 07 Aug 2007 14:14:36 GMT

Noah, I have an unpaid judgement on my TU CR. The "estimated date of removal" is 7 years from the date of filing. I know that they can continue to actively collect the balance of the money I owe (I have been paying on it), but I was unaware that it would not be removed until 7 years after satisfied. This is what you are saying, correct?

Re: SOL versus 7.5 Years

SanFranMatt — Tue, 13 Nov 2007 03:11:31 GMT

Let's say to get a CA off your back, you settle and pay $1200 on an old $3000 debt. 2 years passes, it drops from your CRs, and you rejoice. Then you get served with a summons and complaint. You get sued. Why? Well, for that $1800 you still owe, plus another $4179.83 in penalties, fees, interest, etc. Can they do that? Well, after checking, the SOL in your state is 4 years, you paid $1200 2 years ago, so yep they can sue you. The $4179.83 may or may not be able to get tacked on, but if they can prove the $1800 debt they can collect on it. If they win, and get a judgment, that judgment will get reported, and you have a bad TL on your CRs all over again--perhaps for another 7 years after it's paid.

I see a lot of people recommending a PFD offer of 50% of the balance(give or take). From the quote above, it looks like the CA can agree to that and subsequently sue you for the remaining balance. Is there something special about a PFD where settling for less than the full amount completely satisfies the debt?

Re: SOL versus 7.5 Years

ATMPEABAKER — Mon, 03 Dec 2007 17:32:33 GMT

I agree with SanFran...

If I get someone to agree to a PFD... they could sell the remainder and the new guy could come squeeking in and sue for the rest of the original debt PLUS thier own added on crap?

SO my DH and myself both have very recently closed cc's. I have agreed to a settlement amount and have paid half of that amount. My DH hasn't paid anything... how should we porceed?

Do they ever let you pay and restore the card?

Thanks!

Re: SOL versus 7.5 Years

krystle — Thu, 20 Mar 2008 20:22:12 GMT

Should I count the SOL site listed above as valid? They spelled Minnesota with 2 t's...

Re: SOL versus 7.5 Years

gipsoneight — Wed, 05 Nov 2008 20:30:18 GMT

I have a SOL show up that is from 1996, and I am trying to buy a house I was told by the lender that I need to give him a letter or fax to show that it is paid, I refuse to pay 2000 dollars, do you have any suggestions on how to get this cleared up, or do I just fax a letter to the lender stating that it is a old debt past the SOL, I am so worried that I won't get the house because of this I am now in escrow.

Re: SOL versus 7.5 Years

cato — Wed, 05 Nov 2008 22:56:21 GMT

Hat's off to Noah for a very informative post. It's true that hard pull inquiries have no effect on your FICO after 1 year, as I understand it. But they may still hurt you for lending purposes according to the lender's own inhouse formula which nobody is privy to.

I have 7 hardpulls on Equifax that are 14 months old. For some reason, Equifax has never missed a single pull in my history. Experian has caught less than half of them and TransUnion doesn't have a clue about any of them. Go figure that.

Still, I'm pretty sure a lender would look with askance on those 7 pulls as I was in a credit acquisition phase. I was prepared to bite the bullet for 24 months to clear them off my credit reports in exchange for some quick trade lines.

But I doubt very much this wouldn't affect my ability to qualify for the best rates on some loans even with a relatively good FICO score--times being what they are in the financial markets.

Cato

Re: SOL versus 7.5 Years

mickie08 — Thu, 06 Nov 2008 15:44:05 GMT

If you do a settlement or a PFD on a debt make sure you get the settlement or PFD in writing. THey can not sell the difference. It is only if you make a partial payment on the debt without a formal settlement or PFD and then don't pay the balance.