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Regular Contributor
audia4
Posts: 591
Registered: ‎11-08-2012
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Understanding agencies that buy your loans once defaulted

How does this all work?  If you have a creditor that you stopped paying and they closed the account and wrote it off as uncollectable (I can't think of what the actual term is called at the moment) I know that it's reported on your credit report and then falls off 7 years later.

 

But, what happens when years down the line a collection company buys the account from them and starts pursing the collection and puts it on your credit? Does the 7 years start over for it to fall off again since they are a different collector?

 

If so, one account could go on FOREVER if they keep selling your account off to different collection agencies. Correct?

 

Just looking for some imput on how this all works and what are the rules to this.

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Shogun
Posts: 12,952
Registered: ‎04-15-2011
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Re: Understanding agencies that buy your loans once defaulted

When you go bad on your payments, this makes your first delinquincy.  This is called the DOFD or Date of first delinquincy.   This date never changes, unless the account is brought back up to current and then goes delinquint again.   Anyway, when an account is charged off, they take that DOFD and it sets the CRTP and the SOL clock.  The account can be sold back and forth between 100 CAs, but this DOFD that was set by the OC does not change. 


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audia4
Posts: 591
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Re: Understanding agencies that buy your loans once defaulted


Shogun wrote:

When you go bad on your payments, this makes your first delinquincy.  This is called the DOFD or Date of first delinquincy.   This date never changes, unless the account is brought back up to current and then goes delinquint again.   Anyway, when an account is charged off, they take that DOFD and it sets the CRTP and the SOL clock.  The account can be sold back and forth between 100 CAs, but this DOFD that was set by the OC does not change. 


Sorry, I'm new around here and don't know the lingo of all the abbreviations. I understand the DOFD and that is when it takes 7 years from THAT date for it to fall off? Or is it from the date that they charge it off starts the 7 years?

 

I don't know what the CRTP or SOL clock means? is CA mean credit agency?

 

My question is when the account is sold off and a new agency has reported it on your credit, does that restart THEIR 7 years?

 

For instance:

1st Loan= stopped paying in 2000.   By 2007 it should have fallen off.

 

In 2005, another collection agency aquires the unpaid loan. They are now reporting. No payments ever made. So now THEIR report won't fall off until 2012?

 

Then if another agencies buys out #2 and starts reporting in 2010, you now have another 7 years from them for that one to fall off?

 

(Meanwhile the 1st and original loan is already off and gone).

 

Hopefully that makes more sense of what I'm trying to ask.

 

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princechristian
Posts: 203
Registered: ‎07-20-2012
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Re: Understanding agencies that buy your loans once defaulted


audia4 wrote:

Shogun wrote:

When you go bad on your payments, this makes your first delinquincy.  This is called the DOFD or Date of first delinquincy.   This date never changes, unless the account is brought back up to current and then goes delinquint again.   Anyway, when an account is charged off, they take that DOFD and it sets the CRTP and the SOL clock.  The account can be sold back and forth between 100 CAs, but this DOFD that was set by the OC does not change. 


Sorry, I'm new around here and don't know the lingo of all the abbreviations. I understand the DOFD and that is when it takes 7 years from THAT date for it to fall off? Or is it from the date that they charge it off starts the 7 years?

 

I don't know what the CRTP (credit reporting time period) or SOL (statue of limitations)clock means? is CA mean credit agency? YES

 

My question is when the account is sold off and a new agency has reported it on your credit, does that restart THEIR 7 years? NO

 

For instance:

1st Loan= stopped paying in 2000.   By 2007 it should have fallen off. YES

 

In 2005, another collection agency aquires the unpaid loan. They are now reporting. No payments ever made. So now THEIR report won't fall off until 2012? NO, 2007

 

Then if another agencies buys out #2 and starts reporting in 2010, you now have another 7 years from them for that one to fall off? NO, 2007

 

(Meanwhile the 1st and original loan is already off and gone).

 

Hopefully that makes more sense of what I'm trying to ask.

 


 

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audia4
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Re: Understanding agencies that buy your loans once defaulted

Ok awesome.

 

So what if the 3rd collection agency decides to push it and take it to court and win? Will a judgement go on your credit now even though they were not the original creditor and the time has expired for the 7 years? Is there anything at all they can do at this point as far as your credit report?

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Shogun
Posts: 12,952
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Re: Understanding agencies that buy your loans once defaulted

If they take you to court you would go to court and use the SOL as a legal defense.  Do you still have any documentation of the account proving when the DOFD was.  Do you have any old CRs?  If you do, then you could also make a copy of it and a copy of the new one and send them in with a dispute to the CRAs.  Have you sent a DV to them?  This is actually where I would start the process.


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AndySoCal
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Re: Understanding agencies that buy your loans once defaulted

Collection agency can get a debt to collect on in one of two  ways.  The original creditor can assign your account to a collection agency. The original creditor still owns the debt. The collection agency receives a fee for colleting on the account. The other method  is the original creditor sells the debt to collection agency at a discount.  A collection agency of this type is called a factoring company. In either case all the FCRA and Fair debt collection practices act still apply..

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audia4
Posts: 591
Registered: ‎11-08-2012
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Re: Understanding agencies that buy your loans once defaulted


AndySoCal wrote:

Collection agency can get a debt to collect on in one of two  ways.  The original creditor can assign your account to a collection agency. The original creditor still owns the debt. The collection agency receives a fee for colleting on the account. The other method  is the original creditor sells the debt to collection agency at a discount.  A collection agency of this type is called a factoring company. In either case all the FCRA and Fair debt collection practices act still apply..


Thanks. Good to know in case I run in to a problem.  (The account was sold to an agency).

 

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audia4
Posts: 591
Registered: ‎11-08-2012
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Re: Understanding agencies that buy your loans once defaulted


Shogun wrote:

If they take you to court you would go to court and use the SOL as a legal defense.  Do you still have any documentation of the account proving when the DOFD was.  Do you have any old CRs?  If you do, then you could also make a copy of it and a copy of the new one and send them in with a dispute to the CRAs.  Have you sent a DV to them?  This is actually where I would start the process.


Trust me, I have EVERY credit report since 1984 and keep ALL records.

 

I don't have a problem yet, but I'm just trying to anticipate these guys.

 

I don't remember the EXACT dates and would have to look everything up. But there was a cc in mine and my ex's name. During our divorce, my ex was ordered to pay for it. Well of course, he didn't pay for anything. YEARS later after they closed the acct, a collection agency bought it and tried to collect. It showed up on my credit report (making 2 different negatives on there at the time). Then YEARS later, they sold it to another agency who located me and sent me the "pay this reduced amount now to settle your acct". Well of course I didn't, it's not my bill as far as I'm concerned. So, then I received court papers. I sent the appeal letters in several times and they set up a court date. We went for mediation. They tried threatening me with everything. At the time I went to court, I had just had a baby, wasn't working, didn't have anything they could get or garnish. I told them to go after my ex and they said they couldn't find him so they were coming after me. I told them good luck with that b/c I have no money or job right now. 

 

In the end, we made an "arrangement" for a payment plan for X amount of dollars, but not starting until 3 months later (which is how long I would be off on maternity leave) and for $X in total at a "reduced" price. A month later I received paperwork and EVERYTHING was wrong on it....the payment amount, the reduced amount (they had the full amount) and the start date (which they made it for that month). I told them that was not the agreement I signed and until they sent me the correct paperwork with the right info, they wouldn't get anything from me. They never did.

 

I ended up moving and they never found me again.

 

So about a year later, they went back to court and they were "awarded" X amount of dollars for it. However, I'm not sure what happened to it because it doesn't say a judgement or anything and it's NOT on my credit report at all.

 

I just checked the records and just LAST MONTH they went back to court (this is 2 years after the other court date) and they put in a request to have my name changed on my record (b/c I got married).

 

I'm just wondering what to expect next and if it's going to show up on my credit. These people just don't give up. Can they legally still come after me? It's been over 7 years since my DOFD.

 

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Shogun
Posts: 12,952
Registered: ‎04-15-2011
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Re: Understanding agencies that buy your loans once defaulted

In the end, we made an "arrangement" for a payment plan for X amount of dollars, but not starting until 3 months later (which is how long I would be off on maternity leave) and for $X in total at a "reduced" price. A month later I received paperwork and EVERYTHING was wrong on it....the payment amount, the reduced amount (they had the full amount) and the start date (which they made it for that month). I told them that was not the agreement I signed and until they sent me the correct paperwork with the right info, they wouldn't get anything from me. They never did.

 

This however could be a problem.  you signed papers, you agreed to the debt.  This has potential of restarting the clock.  Is there a judgement?  A judgement is also different and would procede past the 7 year mark.


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