Closed account but balance getting updated

Anonymous · ‎04-27-2017

Hello All!

In Oct of 2011, I opened a car loan with Wells Fargo Dealer Services. End of 2012 I lost my job, fell behind on payments, and eventually had a major issue with the car. The timing belt broke and the transmission needed to be replaced. Being tight on money, I thought I was working out a deal with WFDS by surrendering the car. They informed me at the time they would repossess it, and contact me to work out a payoff amount. 4 years later, I still have not been contacted by them. It's at that point where I'm planning on just letting it fall off my credit report.

It shows as closed on my 3 reports. For Experian, it lists Closed, payment status as a Charge off, status updated 2/1/2014. But the balance was updated on March 31st of 2017. For Equifax, it's listed as closed, does not list a closing date, but does show it was Charged off in Feb 2014, and again was last reported on Mar 31. Transunion Lists it as Closed-Derogatory, Closed date of Nov 30, 2013, and date last reported on Nov 30, 2013.

In applying for some credit in the past, most agents haven't brought it up, but one did mention it was still showing and affecting my score. Can anyone explain if that is correct? They have not contacted me, and from my understanding, once an account is closed, they can't update it with without contact with me. It's currently $7700 listed. This does not show up on any report as debt. Is this something I should try to pay off or to work with WFDS to get taken off my report? I'm not flush with cash at the moment, and would rather just wait the 3 years for it to fall off if that indeed is the magic number. Do I need to contact the credit agencies about the balance update? From what I understand, the last thing I want to do at this point is contact WFDS. Is that correct?

I'm in the process of cleaning up my credit report. I have just paid all my accounts in collections, outside of WFDS, and waiting for them to fall off. Scores- Ex:592, EQ:580, Trans:618. I have 2 Credit One Bank credit cards that currently have a high balance, but those are getting paid off next month. My scores should see a bump from that. I've applied for another card with Capital One, hoping to get one that can offer a higher limit in time, and no annual fees. Still waiting to hear on my approval.

Any help or insight on this issue would be greatly appreciated. Been working so hard to fix my past mistakes, and this is my last issue to address!

Anonymous · ‎04-27-2017

Welcome to Myfico, this is the best place for anyone rebuilding. Most of us have been where you are so we can provide some insight that you cannot get elsewhere. The ideal place to put this post would be the rebuilding section because that is where the rebuilding experts hang out and help folks. You will have to take the intiatiative with WFDS to clear this up, they generally don't contact you on something like this for some time and when they do they have ran up your interest and other charges and then turn their collections loose on you. I suggest you determine what the statute of limitations are for this type of debt in your State and how they would deal with a judgement, can they garnish wages? That information would be important to determining what I would do. Also you need to decide if you want this to stay on your credit report for 3 more years. If you want to get a mortgage it will be a significant issue and it will impact your scores substantially until it falls off however as it ages it will have less impact (lots of caveats to that however).

One thing you could do is dispute this on all three agencies, they are not likely at all to remove it but they will probably update the dates, the statute of limitations for the credit report is 7 years after the date of first delinquency (30 day late), if you had a 30 day late and then made a payment it reset the clock but if you stopped paying and it eventually led to the repossession then its that first 30 day that would be the date of first delinquency.

Probably the best option is to negotiate a pay for delete. Not sure if they would do it but you can try to offer than 20 or 30 cents on the dollar to resolve this if they remove it from your credit report. Even if they took the money as a settlment but still reported it to the credit agencies as paid for less than the full amount it would have a positive impact on your scores because a paid negative is always better than an open on that hurts your score month after month. I did this with an old credit card account, settled a $2,200 debt for $700 they would not remove it but as soon as they showed it paid it improved my score and had I pursued a mortage because the matter was closed it would not have impacted my ability to get approved.

Anonymous · ‎04-27-2017

Thank you! I'll move this post to that area shortly.

Regarding the statute of limitations, since the contract was signed in California, it is 4 years. Is that from account close date or date of the first late payment? If it's first late payment, then seems like the time is past.

Revelate · ‎04-27-2017

As long as there is still a balance it can be reported regardless of open / closed, and unfortunately (and I hate CO's for this reason) a charge-off "correctly" reporting will continue to report every month with the CO notation keeping it current until the balance is $0.

My typical recommendation around credit card charge-offs is to simply pay it if you can't get it negotiated away, as at least that draws the line in the sand and gets it aging.

Otherwise you're looking at 7 years from when you first went late leading to the terminal CO, which sounds like it's still a few years away.

rmduhon · ‎04-27-2017

As long as the account is unpaid it can be reported every month until either it's paid (either by PIF or settling) or yhe account reaches the credit reporting exclusion date which is 7.5 years from the DoFD (Date of First Delinquency). CRA's routinely exclude derogatory accounts at 7 years though.

Anonymous · ‎04-27-2017

@Anonymous wrote:
Thank you! I'll move this post to that area shortly.

Regarding the statute of limitations, since the contract was signed in California, it is 4 years. Is that from account close date or date of the first late payment? If it's first late payment, then seems like the time is past.

Not sure. My guess is it would be from the last payment otherwise any loan over 4 years in duration would be uncollectable. Also I suspect the statute of limitations that is applicable is for the State you reside in not where the contract was signed. I am not a lawyer so I can't say that for a fact but that is my best guess. Otherwise you would have folks living in various states being impacted by other states laws. You might be able to find out through a google search or a quick conversation with an attorney.

UncleB · ‎04-27-2017

Welcome to myFICO!

Hi @Anonymous, I've merged your multiple identical threads into one. Please refrain from cross-posting whenever possible, since it's confusing to follow and is against this site's Terms of Service.

--UncleB

myFICO Moderator

RobertEG · ‎04-27-2017

FDCPA 811 provides explicit authority for a debt collector to sue in either the state where the contract that created the debt was signed, or in the state of current residency of the consumer. For various legal and administrative reasons, debt collectors will usually bring civil action in the state of current residency of the consumer.

The SOL used at any trial will be that of the jurisdiction (state) where the court resides.

However, many states have "borrowing" provisions that permit the SOL period of a prior state of residence to be used if it is shorted than the period in the state of current residency. You need to review your state SOL to see if it incorporates any borrowing provisions that might provide a shorter SOL.

Most contracts include provisions that permit the continued accrual of interest, regardless of whether the account is closed or has been charged-off.

Your notice of that fact is the contract that you signed when you created the debt.

Anonymous · ‎09-09-2017

The date a delinquent account of mine was CLOSED is 10/31/2013. I have been filing complaints with various agencies and getting nowhere because the company lies! Now they have refused to even respond to the Attorney General's office (Consumer Protection) in my state! My monthly payment when this account was purchased by this company was $341 a month; it was a revolving account and I owed $12,500 for a roof and windows which I was paying promptly for 3 years with the previous company. This new "finance company" changed my account to a closed end account and that is when it became delinquent by me. The problem is this: They lied on a response to an agency and I have to keep refiling for someone to pay attention. They have "boosted" the amount owed over the last 4 years to $24,000!!! They have done this by adding the payment of $341 on for 4 years after the account was closed. This is not "accrued interest" of $341 a month; it is the payment! Can I receive any responses on how I can tackle this short of talking to the company which I will never do. It will be removed from my report in October 2020 and I am ok with that. But in the meantime I want to get them to stop this shoddy behavior. There are 100s of complaints against this company for all sorts of bad business dealings. Thanks for any help.