Will outstanding balance go away?

[Patsey65]

I was told this week by a mortgage broker that the balance I owe for a repossessed car will never come off my credit history and therefore I must pay the amount they still show outstanding.  This item HSBC is scheduled to fall off in August 2012, just a few months away, is he correct in saying that I still will have to pay the amount even after seven years in order to get a mortgage?  If so, I will start negotiations with the creditor now,  if not then I will wait until it falls off in August.

Any help is greatly appreciated.

[pizzadude]

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@Patsey65 wrote:

I was told this week by a mortgage broker that the balance I owe for a repossessed car will never come off my credit history and therefore I must pay the amount they still show outstanding.  This item HSBC is scheduled to fall off in August 2012, just a few months away, is he correct in saying that I still will have to pay the amount even after seven years in order to get a mortgage?  If so, I will start negotiations with the creditor now,  if not then I will wait until it falls off in August.

Any help is greatly appreciated.

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It depends.    I'm pretty sure that you have to list all of your outstanding obligations on a mortgage application, so regardless of whether this is on your report it may have to be paid.    Also, you need to look at your state's SOL for unpaid debt for written contracts to know where you stand in terms of possibly being sued.

The CA tradeline will stop showing on your credit reports at 7.5 years from the DOFD of the original account.

[RobertEG]

FCRA 605(a) is definitive:

"Except as authorized under subsection (b) of this section, no consumer reporting agency may make an consumer report containing any of the following items of information:

......

(5) Any other adverse item of information, other than records of convictions of crimes, which antedate the report by more than seven years."

The subsection (b) exemption applies only to requests for CRAs that are to be used in connection with consumer requests for credit or insurance that exceed $150K, or for employment purposes where the annual salary exceeds $75K.

The only item under section 605(a) that does not have a specific date pegged to the date of occurence of an adverse item is item (3), unpaid tax liens, which dont have a date of running of their exclusion period until the tax lien is paid.

A balance owed on a repo is an adverse item of information, and would be excluded under subsection (5).

However, CR exclusion does not prevent any creditor who has become aware of an adverse item, regardless of whether it has been excluded from your CR, from demanding its satisfaction as a condition for their credit.  So your broker was correct... it does not come off your credit history.  Unfortunately, he may have given the wrong impression that it does not come off of your CR.