05-04-2013 10:00 AM
05-04-2013 10:15 AM
Well, IMO, they are letting them off too easily based on the fact that the debt was discharged and you aren't responsible for it. The fact remains that the creditor is reporting incorrectly and should not be allowed to do that.
It is causing your score to be damaged, thereby not allowing you to receive credit if you applied. Period. No creditor should be allowed to report like that.
05-04-2013 10:47 AM
05-04-2013 07:14 PM
05-04-2013 08:04 PM
I'll have to some more checking but even with a BK they have to show a 0 balance. You can have the lates up until the time the BK was filed but not after. That is against the law. So I will need to see if the same holds true for a PT&D discharge.
And you didn't waste any of my time, don't even worry about that.
05-05-2013 06:35 AM
Darlin I am VERY glad to know it is not a total "Waste" or irritation - I can't shake that feeling though! You're VERY much appreciated especially for someone who came out of thin air and has refused to throw in the towel . I'm beyond words again!
Been hunting around and found a few other things. I know I'm hitting on "taxation" aspcts - but - with the fact it is a "taxable" situation, and the way the language is written within the actual USC or others, I *can* see this being accurate BUT inaccurate. It is accurate that YES - it is fair and honest to report that on Aug 2012 the P&TD conditional period ended and the discharge/cancellation became FINAL. It is NOT accurate, however, to state that it was Derog from 2009-2012 - during the PROTECTED period - just as in a BK. We are all in agreement there.
Look at this citation: http://www.finaid.org/loans/forgivenesstaxability.
1) "Section 61(a)(12) of the Internal Revenue Code of 1986 (IRC) specifies that gross income includes income from the discharge of indebtedness of $600 or more in any calendar year. However, IRC Section 108(f) specifies conditions under which student loan forgiveness is excluded from income. Specifically, IRC section 108(f)(1) states that:";
2) SECTION 437(a) of Higher Education Act: In fact, the Department of the Treasury has specifically stated that student loans cancelled due to the Death and Disability Discharge (Section 437(a) of the Higher Education Act of 1965)
I know this is ALL tax-related above, but the point here is to follow this money in order to follow the reporting. While I agree that, pursuant to your last post of " Up until the date the BK was filed" which one would think is the same and applicable to THIS type of "cancellation" of debt.
SO I dig deeper into the Higher Education Act:
1) If approved, you will get a final discharge of your loans. The discharge will be effective as of the date the doctor signed the application form. There is no longer a three year conditional discharge period except for borrowers who applied before July 1, 2010. Sample letter #1 is the letter you should receive if your application is approved. Any payments received after the date the doctor signed the form must be returned. This includes voluntary and involuntary payments, such as wage garnishments and tax refund offsets. The discharge will also be reported to credit bureaus once A) Your conditional period ends (if before July 1, 2010) or B) Upon FINAL discharge and you meet or have met the 5 year monitoring period for possible reinstatement of the discharged loans. (NOTE THERE IS ANOTHER SECTION ALL BY ITSELF RELATING TO THIS PERIOD BUT IS NOT APPLICABLE AS I FELL UNDER THE OLD RULES, NOT THE NEW ONES, AND I DO NOT HAVE THIS MONITORING PERIOD SINCE I WENT THROUGH THE 3-YEAR CONDITIONAL PERIOD). You should consult a tax professional regarding possible tax liability for the discharged amount.
"NO LENDER MAY TRY TO COLLECT PAYMENT, DEMAND PAYMENT, OR OTHERWISE BILL A DEBTOR WHO IS IN A CONDITIONAL/MONITORING PERIOD. WHAT THIS MEANS TO YOU? THE LENDER CANNOT EVEN ACCEPT YOUR PAYMENT, IF YOU VOLUNTARILY SEND ONE, IN ADDITION TO CEASING ANY AND ALL COLLECTION, GARNISHMENT, OR OTHER MEANS TO COLLECT MONIES OWED ON THE LOAN.
3) ONCE YOU RECEIVE YOUR DISCHARGE LETTER, THE LOAN BECOMES "CANCELLED" AS OF THE DATE INDICATED ON THE LETTER. THIS WILL ALSO BE REPORTED, AT THE DEPARTMENT/LENDER'S OPTION, TO THE CREDIT BUREAUS BUT A LENDER MAY NOT USE THE DISCHARGE DATE AS THE DATE OF LAST DELINQUENCY. THE LENDER CANNOT REPORT THE LOAN AS DELINQUENT OR MUST SHOW THE LOAN AS "CURRENT" AND IN A "DISCHARGE" PERIOD STATUS. iF THE LOAN IS NOT DISCHARGED DUE TO A WAITING PERIOD OR OTHERWISE, THE LENDER MAY REPORT THE LOAN AS "PAYMENT DEFERRED UNTIL FULL DISCHARGE OR CANCELLATION OF THIS DEBT" OR OTHER SIMILAR LANGUAGE.
4) FURTHERMORE, IT IS AGAINST THE FDCPA FOR A LENDER TO POST THE LOAN ACCOUNT AS DELINQUENT ONCE PRELIMINARY APPROVAL HAS BEEN GRANTED TO THE DISCHARGE OF THE LOAN UNDER THE PERMANENET & TOTAL DISABILITY PROVISIONS OF THE CODE. FOR PRIVACY REASONS, THE LENDER CANNOT REPORT OR STATE "DISABILITY" OR REVEAL ANY MEDICAL INFORMATION. THE LENDER MAY REPORT, HOWEVER, THAT THE LOAN DISCHARGE IS "MEDICAL RELATED" AND MUST IMPOSE SAFEGUARDS TO ENSURE REPORTING OF ANY LANGUAGE REFERRING TO THE DEBTOR'S HEALTH BE SUPPRESSED. A GENERALIZED CATEGORY OF "MEDICAL DISCHARGE/CANCELLATION" IS THE COMMONLY SEEN LANGUAGE USED BY EXPERIAN AND TRANSUNION WHILE EQUIFAX OFFERS THE CONSUMER TO SEE ALL DATA. LENDERS THAT SEE YOUR CREDIT REPORT SHOULD NOT SEE THESE ITEMS BUT ARE SHOWN ON YOUR CONSUMER REPORT FOR YOUR USE ONLY. YOU CAN CALL THE CRA TO ENSURE THE DATA IS SUPPRESSED.
5) NO LENDER MAY REPORT, RE-AGE, OR OTHERWISE "BACK-DATE" ANY DELINQUENCIES TO THE CRA'S. THIS IS SIMILAR TO THAT OF A BANKRUPTCY PROCEEDING IN WHICH UPON THE FILING OF A BANKRUPTCY PETITION, ANY & ALL COLLECTIONS MUST CEASE AND THE LENDERS MAY NOT REPORT THE ACCOUNT AS DELINQUNENT BUT RATHER AS "IN BANKRUPTCY" UNTIL SAID BANKRUPTCY CASE IS RESOLVED. FOR PURPOSES OF THIS SECTION AND ALL SUBSECTIONS, THE DISABILITY DISCHARGE FOLLOWS THE SAME RULES AS THE BANKRUPTCY RULES. ANY LENDER OR DEBTOR ARE BOTH OBLIGATED TO OBLIDGE BY SUCH RULES AND ANY VIOLATION CAN RESULT IN DENIAL OF A DISCHARGE FOR THE DEBTOR OR A SANCTION TO THE CREDITOR. HOWEVER, IN NO CASE ONCE FINAL DISCHARGE IS OBTAINED, MAY A LENDER REPORT THE ACCOUNT AS ANYTHING MORE THAN "FINAL DISCHARGE/CANCELLATION EFFECTIVE MM/DD/YYYY".
Hope this offers SOME insight and I can get the actual excerpts from each individual page/area/section if needed.
Based on all this though, I think we have the necessary data for me to successfully get this account (and ANY other SL account) to report properly. I need some CONCRETE FDCPA info though - that way I can cite that given this is more of an FDCPA matter than anything; we're beyond the P&TD aspects - this is now, as you originally stated WAYYYY back in the thread, a DD with the Lender along with the FDCPA vios....
Looks like they cannot re-age but at the same time, that posting of the discharge date DOES re-age automatically. There exists NO language specific to this; and I am speculating this will be a CRA to CRA issue as the lender is reporting properly but the CRA is interpreting that data incorrectly, which then RE-AGES the account, which then drops my score 100 points EASILY.
My guess is the "Status Date" has to be an "OK" or "PAA" with JUST a notation of "FINAL DISCHARGE/CANCELLATION OBTAINED 08/01/2012" - or in whatever "Field" the CRA's use that will not change or make any difference to my scoring/history/et.al. Truthfully I'm not sure what "fields" are read, interpreted, etc. and/or how they impact the scoring, but nevertheless, this is proof-positive that whatever "Fields" the data is being placed into are data fields that allow the scoring model to "make a decision" about my score. I'm sure you know this but I'm just now learning something new!!! Go figure . Anyway, I suppose the objective now is to get with each individual CRA, unless Sallie knows (or SHOULD know) how to report it to where it does NOT cause a retroactive scoring change - as this is exactly what is happening - and can be seen/evidenced by what happened once this final discharge date was posted to the CRA's. The weird thing is TransUnion has NOT been impacted by the data they've reported - only EXP and EQX - report this in the derogs.... TU is up in the upper 700's and the other two are in the mid-upper 600's. Prior to the discharge, scores were mid-700's across, fluctuating a bit, but ulitmately has had NO change until now.
Crazy eh? SO now it's a matter of me hashing it out with the CRA itself and telling them "Hey - you need to ensure THIS info is not part of your scoring/calculation/everything" as it is nothing more than a reporting of FINAL discharge date - nothing else changed - now fix it!!!!!
Let me know if any of this sheds more light and if not, I WILL DO THE DIGGING for you . Thanks again my dear - we're almost there!!!!!!!!!
THANK YOU AGAIN MY DEAR BIG HUGS THIS SUNDAY FOR YOU
05-05-2013 08:40 AM
Having a 1099 issued and the way they are reporting are two separate things.
The inaccurate reporting would fall under the FCRA. FDCPA is for 3rd party collection agencies.
Reaging is when the DoFD is changed. It is illegal for any lender/'creditor to do that. The only time it could legally be changed would be to bring your account current then become late again, thus having a new date of first delinquency. That did not happen in your case.
The debt is cancelled due to the discharge. Thal tradeline should be reporting as the others.
05-05-2013 09:34 AM
Thank you for the correction & clarification on the FCRA and FDCPA. I was using them synonymously when I shouldn't have!
Yes, I do understand a 1099-C being issued is a tax matter & the reporting is separate. My "objective" was to somehow tie them all together, in order to establish the true DOFD date and/or Discharge Date Impact. As you said, it is illegal to do this practice: Changing the DOFD date/re-age. Before I begin round #19 on this tomorrow, I wanted to ensure that the "Final Discharge Date" does not mean, in theory, that it brought the account "current" & the "Final" CO then occurs. I don't know hun this is all starting to get so over and above my head I'm beginning to speak credit-acronyms in my sleep....
I cannot, for the life of me, find ANYTHING about what this "Final Discharge" date really does to the TL. I understand we have a reporting problem that stems from this given NOTHING changed until the FInalization. This is where I would ideally like to have some citation of law or even at least some case-law surrounding the matter. Should this get to court, it will definitely be needed then however (and I know you understand/agree/get it) I need to understand it myself or I won't be of any help. This is NOT to say that anything from here is not helping - believe me it is and then some - but I have some weird feeling that this Final Discharge Date, which triggered it all, may in fact be accurately reporting into a derog category.
While this creates another waiting period of being penalized credit-wise, I would think that if all this pans out to be true (hypothetically), then "time served" should be issued in the form of four years - as I have already "Served" that portion of my "penalty" regarding this TL. Let's say the "final discharge" did bring it current and then they've CO'd it. Technically, during that conditional timeframe, the OC wasn't guaranteed, 100%, that this would be finalized so they went under the assumption that they could re-collect if I never got the "Final Discharge" as I miraculously became non-crippled. Now the OC can resume collection as if an automatic stay was lifted in a bankruptcy. I know the two laws are VERY different but it is the only example that the attorneys have used to explain it along with what I find out online. At the end of the day, the OC's TRUE discharge was received Aug 2012; and while it may or may not make sense (again, I apologize as it is all starting to sound the same to me - no one's fault but my own - will explain in a PM, not on here as to why if you ask me), knowing what, how, and why this "Final Discharge" is capable of is now the main question. I'm at the disadvantage given MANY other circumstances - even new ones I have not brought up as I don't want to irritate more - that may or may not be applicable. I know DOFD is set in stone UNLESS certain actions are taken (eg payment and then default as you said), but in this instance, I'm now to the point I KNOW this "Final Discharge" date is the root cause. The inaccurate reporting is secondary to the main issue of the discharge/cancellation depending on what and how the finalization does to the TL.
What do you think about that aspect or am I REALLY starting to just overthink, overstretch, and even start doubting myself?
Gosh you all must think this guy is a REAL piece of work and his mental-disabilities are truly showing!!!!
05-05-2013 10:07 AM
Final discharge wouldn't change any thing. The TL would still report as it did in the conditional discharge phase. That being said, once the conditional discharge is granted they cannot report late payments after that date.
Conditional discharge. During the conditional discharge period:
The borrower is not required to make any payments on his or her loan(s);
The borrower is not considered to be delinquent or in default on his or her loan(s), unless the borrower was delinquent or in default at the time the conditional discharge was granted;
If you were never late, they cannot report you as such.
05-05-2013 10:13 AM
I'll be danged........ With as many sites, Dept of Ed, SL's, etc., I don't know HOW I missed that. Who are you Guiness that you can find this stuff THIS quickly? Wow!!!
Well, that answers it all then about the timing. And I see it with my own eyes. It's dated back to the "Protected Filing Date" - now I "get" what that means/meant as well.
As of that Protected Filing Date, NOPE the account was perfect. It was in a deferrment pending application approval and not one late.
Time to have some fun and kick some OC's behind
Thanks so much Guiness... I REALLY mean that!