Best Approach to Paying Collections Agency?

[Anonymous]

Hello everybody. I have two accounts in collections on my credit report that I would like to pay off in full. Long story short, they are the last two negative items on my report after a LONG struggle to fix my finances.

The last of the two accounts in question is currently due to "expire" from my reports in 23 months (the other one expires in 15 months).

I will first be attepting "pay-for-delete" letters in hopes of having the two accounts completely removed after payoff.

MY QUESTION: If the pay-for-delete approach doesn't work, will paying off these small collection accounts "reboot" the last past due date, thus keeping these listings on my report for another seven years as opposed to the 24 months until they fall off as mentioned above if I were to ignore them? I'm all for doing the right thing and paying my debt, but this is a major concern after all the work already put in to pick myselp up. I want to be sure I make the right move here at the finish line.

I HAVE already called both agencies. I DID NOT acknolwdge the debt was mine over the phone, but stated I wanted a physical bill mailed to my current address to "examine further and possibly just pay it off to get rid of it". I figured I would go with the pay-for-delete approach once I reieve the invoices. 

Thanks for any help.

[Anonymous]

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@Anonymous wrote:

Hello everybody. I have two accounts in collections on my credit report that I would like to pay off in full. Long story short, they are the last two negative items on my report after a LONG struggle to fix my finances.

The last of the two accounts in question is currently due to "expire" from my reports in 23 months (the other one expires in 15 months).

I will first be attepting "pay-for-delete" letters in hopes of having the two accounts completely removed after payoff.

MY QUESTION: If the pay-for-delete approach doesn't work, will paying off these small collection accounts "reboot" the last past due date, thus keeping these listings on my report for another seven years as opposed to the 24 months until they fall off as mentioned above if I were to ignore them? I'm all for doing the right thing and paying my debt, but this is a major concern after all the work already put in to pick myselp up. I want to be sure I make the right move here at the finish line.

I HAVE already called both agencies. I DID NOT acknolwdge the debt was mine over the phone, but stated I wanted a physical bill mailed to my current address to "examine further and possibly just pay it off to get rid of it". I figured I would go with the pay-for-delete approach once I reieve the invoices. 

Thanks for any help.

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Welcome to the forums.

If you plan to pay the accounts and do not succeed with PFD, pay off the accounts, but do not make any arrangements that you cannot follow through on.  The accounts will fall off as scheduled.  If the accounts are updating monthly then it keeps your score from recovering, but if you take care of the accounts, then your score will start to improve and potential creditors will see that you've taken care of past obligations.  If you are realistically unable to take care of the collections and they are outside the SOL, then you will have to wait until the accounts are excluded from your reports. 

[RobertEG]

FCRA 605(c) clearly mandates exclusion of any collection, regardless of when reported or whether it is paid or unpaid, no later than 7 years plus 180 days from the date of first delinquency on the account that created the debt.

Making any payments (or making no payments) will not reset or extend the exclusion of the collection.

It is based only on the DOFD, and no other date.

[Anonymous]

Question about that Robert. So what about all these companies that have shell companies and pass off the debt one from another to keep it active? I had a 10 year old debt that kept bouncing around I finally got garnished. I kept disputing it and never got a letter as to why I owed. This was just a few months ago I got garnished. Then the new law took place and they would have had to wipe it anyway.

[Anonymous]

Once it sells to "another company" doesn't it become a new debt?

[RobertEG]

There are two totally separate periods running on a delinquent debt.

First is the required exclusion of any adverse information reported to a CRA.

Those dates are clearly set forth under FCRA 605.  

Monthly delinquencies must become excluded no later than 7 years from their date of delinquency.

Collections and charge-offs must become excluded no later than 7 years plus 180 days from the DOFD.

In regard to collections and charge-offs, a bit more detail may be helpful.......

The FCRA was amended back in the mid-1970's to explicitly clarify when a collection must become excluded,  Prior to that time, yes, FCRA 605(a)(4) was routinely interpreted as providiing for reset of the 7 year exclusion period when it passed to another debt collector..  Congress intervened and added new section 605(c), which clarified that any collection, regardless of when reported or regardless of any other date, must become excluded no later than 7 years plus 180 days from the DOFD on the original debt.  That clearly set a date-certain for exclusion of any collection that is independent of any other date or any other action by the creditor, debt collector, or consumer.

The second date running on a delinquent debt is the statute of limitations within which the owner must initiate civil action if they seek a judgment.

Each state sets its own SOL, and in most states, making any partial payment can reset the running of the SOL.  However, as detailed above, making any partial payment does NOT reset the credit report exclusion period.