Hi Meluchi5
Sorry to hear you got a curve ball at the end of the year.
Don’t EVER admit you owe the debt. Don’t EVER talk to the collection agents on the phone. Don’t EVER agree to pay anything until you know all the facts and options.
There are some things you need to find out first BEFORE you make any choices.
1) If the Statute of Limitations (SOL) has run out on that debt. If it has you are judgement proof, however another date comes from the FCRA and it allows them to report the debt for 7-7.5 years. Both rely on the Date of First Delinquency (DOFD). Knowing this date is imperative to any choice you make!
2) The DOFD NEVER changes. NO matter how many times an account is sold this date is always the same and MUST be reported correctly by whomever is reporting the debt to the CRA’s. otherwise you sue and win!
3) To find the true DOFD the easiest way is through your Free Annual Credit reports. I have found recently (through hard experience) that there can be a difference between what the electronic documents obtained through the online process shows and what the mailed document show. I would go with the slower mail requests, but it is up to you.
4) These reports do not give a score but they give details, and must show all account activity and by federal law it must be valid. Things that have aged past their shelf life will not be on this report, only things currently affecting your credit will be here, plus current soft inquiries.
5) The different CRA’s can show it in different ways. You will look for one of two things (if both are there make sure they jive). You will look for field that says DOFD (or something similar) and that date must be the date that caused the account to go into collections. If it does not show a DOFD directly look for a note that says “account will remain on report until XX/YYYY. This is your starting information.
6) for SOL it is easy to figure if it does not show the actual DOFD. Take the XX/YYYY month and year for it to remain on your report and subtract 7. To that month year add your states SOL. (you must research that and it depends on the type of account that is in collections). IF that year has passed then the SOL has run its course.
7) for FCRA reporting purposes it might be a little more complicated. That law allows a debt to be reported for 7 years PLUS 180 days from the DOFD. This is why the DOFD for FCRA purposes must NEVER change no matter who buys the collection account.
8) Date of Last Activity and Date Reported are NOT the DOFD, no matter what a collection agent says. They mean squat in terms of knowing if you can be sued or how long the item can stay on your report. They do present other opportunities to dispute the entry.
9) you MUST be aware that there is some fuzzy language in the FCRA that can allow a Collection Agency to try and claim a different DOFD. This occurs if they bought the debt and the OC or selling CA did not provide the correct DOFD. Don’t despair because in a lawsuit this works for you if the SOL has passed.
10) if the SOL has passed you are judgement proof but the CA is still able to try and collect the debt from you and may try trickery, lies, deceit, threats and harassment. They will be breaking the law and you can sue the stuffing out of them if you can prove it. So document EVERYTHING and EVERY date.
However, there is a caveat that you must be aware of and is why you NEVER talk to them on the phone, you communicate only in writing. If you even remotely admit to owing that debt or agreeing to pay something towards it (like a plan) you immediately reset all the clocks. This becomes a new contract modifying your rights and putting you on the hook. That debt will be on your reports for 7-7.5 years past the date you make the last payment.
11) If you choose to try and get a PFD, nifty, but get it in writing and never admit to owing anything or give them a single cent. If you try this and are following the advice to only communicate in writing, phrase it something like. “While this is not my debt, your attack on my credit is not worth going to court over for this amount of money...”. This type phrasing prevents them from using your attempt to PFD, which is an Offer in Compromise, to prove you own the debt in case the PFD negotiations fail.
12) If they threaten a lawsuit do not ignore it. They will get a default judgement if you do. If your SOL has passed, and they sue, you must AFFIRM a positive defense based on SOL in the FIRST communication with the court. You cannot bring it up later in most courts. The affirmation then places the burden on the CA to PROVE with documentation that the original DOFD is what they claim it is. They usually do not have this documentation, and that means YOU WIN.
Some CA’s just have a mean streak and will tease you along to get a provable admission and then sue you. This is because a Judgement lasts longer than a credit report collection and does more damage to your score, and they know that. It becomes more leverage against you.
Things to never do!
1) Speak to a collection agent on the phone!
2) admit to owing a debt!
3) agree to pay until you have all the facts, don’t even hmm and haw about it. That debt is not yours is all you want to say.
4) Don’t be afraid of the courts. Just know your rights and the rules!
5) Don’t be impatient. There are specific number of days each action is allowed to take. If you rush and they don’t get enough time to finish in those dates you reset the clock on how much time they have.
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Things you should do!
1) Find the DOFD
2) Find the SOL
3) communicate only in writing
4) The very first letter should be a Debt Verification letter. This should be generically polite, not threaten lawsuits or mention laws or even show you know your detailed rights. You should ask them for the DOFD, Account history of payments from original creditor, who they got the loan from, when, and was it a bulk purchase. If you try to do a verify through the online CRA dispute they will simple respond “yep its valid”, if you force them to write a letter, one they know has also gone to the CRA’s, they know the clock is ticking and that they must either verify the information or remove the entry from your report. Don’t be surprised if they respond with a form letter that does not give you the answers, just move to the next step.
In this same letter you will NEVER admit to owing the debt and you will tell them to only communicate with you in writing. Send this Signature Required. Return Receipt Requested through the U.S. Mail. All communication must be done this way!
5) collect any mailed communication from them including the envelope.
6) anytime they call, let it go to voice mail. Note the time and date and store the voicemail in a safe space like Google Drive. Name it with the date and time the call came in for further use.
7) go through your cell phone bills and look for calls under 1 minute. Search the internet for these numbers. You will find out which ones are reported as belonging to CA. Note the date, time and duration. That info may show they are breaking your demand to only communicate in writing. Then you sue them for that under FDCP which is yet another law.
8) Anything you send to them, keep the receipt and the return receipt with signature. Keep a copy of the letter. This is to the CA and CRA. This proves the dates which are imperative.
9) search the forums for samples of all the letters you might have to write to get the wording correct.
10) find out if your state has stronger protections than Federal Law, some like Texas do and have fines up to $10K for each violation.
To be blunt most people are not organized enough to handle this themselves and not screw up the timing and content.
Consider turning this over to Collection Shield 360, Lexington Law or some other debt attorney. I know that CS360 does this for free and only makes money if they get to sue on your behalf. You even get 20% or a minimum of $200 if they win your case. You never pay a fee. I don’t know about any others. They can make money because court costs and legal fees are allowed under the law.
Good Luck and keep us informed! We are all rooting for you
Mike
Starting Score: EQ 628 | TU 643 | EXP 618
Fico 8 12/22/16: EQ 658 | TU 682 | EXP 721
Next Goal: 700's across the board
Credit Karma: EQ 554 | TU 551
CK 12/22/2016: EQ 637 | TU 637
