SOL versus 7.5 Years

[SanFranMatt]

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.

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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?

[Anonymous]

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!

[krystle]

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

[Anonymous]

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.

[Anonymous]

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

[Anonymous]

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.