I saw this on a website and was wondering if it was accurate. If so does the date of first miss payment or date of first default affects the SOL?
2. When Is the Date of First Default?
The day you miss a payment is the date of first delinquency, but the point at which your unpaid loan goes from delinquent to default depends on the contract and where you live. “Generally, after a missed payment there is a grace period, during which there may be fees,” says Lisa Stifler, a senior policy counsel at the Center for Responsible Lending. “Then it goes into default after some time.” For example, for credit cards the date of first default is usually 180 days after a missed payment.
@Unique620 wrote:I saw this on a website and was wondering if it was accurate. If so does the date of first miss payment or date of first default affects the SOL?
2. When Is the Date of First Default?
The day you miss a payment is the date of first delinquency, but the point at which your unpaid loan goes from delinquent to default depends on the contract and where you live. “Generally, after a missed payment there is a grace period, during which there may be fees,” says Lisa Stifler, a senior policy counsel at the Center for Responsible Lending. “Then it goes into default after some time.” For example, for credit cards the date of first default is usually 180 days after a missed payment.
Total BS there, the DOFD is accepted as the 30 day late that immediately preceeeds the CO and it goes for ALL types of accounts not just credit cards.
Thanks for clarity.
@RobertEG wrote:I think what she is referring to is when the delinquent account becomes subject to federal regulations requiring taking of a charge-off, and is not referring to the DOFD as defined under the FCRA.
A delinquent account normally requires charge-off at 150 days for installment loans, and 180 days for revolving credit. That requires moving the debt from the receivable assets column of their accounting books over to the bad debt column. She is apparently using the term default to reference a delinquent debt that has reached that state of delinquency.
Hi RobertEG. Thanks, However gdale6 is correct. The website is stating the DOFD begins the late payment before the charge off. And it didnt' sound right to me. I needed to know because their is a collection agency that refuses to do a PFD and maybe after they can't sue me, they will be more willing to do so.
@Anonymous wrote:
@Unique620 wrote:I saw this on a website and was wondering if it was accurate. If so does the date of first miss payment or date of first default affects the SOL?
2. When Is the Date of First Default?
The day you miss a payment is the date of first delinquency, but the point at which your unpaid loan goes from delinquent to default depends on the contract and where you live. “Generally, after a missed payment there is a grace period, during which there may be fees,” says Lisa Stifler, a senior policy counsel at the Center for Responsible Lending. “Then it goes into default after some time.” For example, for credit cards the date of first default is usually 180 days after a missed payment.
To answer your question - yes the SOL is generally based on the DoFD. There are some exceptions, for example Texas laws states that the SOL is to run from the date of last payment.
Thanks I am aware of that, the statement is not saying that it is stating the DOFD is the payment before it is charged off and I knew it was incorrect so I reposted to get an answer from our experts in the forum.
@Anonymous wrote:
@Unique620 wrote:
@Anonymous wrote:
@Unique620 wrote:I saw this on a website and was wondering if it was accurate. If so does the date of first miss payment or date of first default affects the SOL?
2. When Is the Date of First Default?
The day you miss a payment is the date of first delinquency, but the point at which your unpaid loan goes from delinquent to default depends on the contract and where you live. “Generally, after a missed payment there is a grace period, during which there may be fees,” says Lisa Stifler, a senior policy counsel at the Center for Responsible Lending. “Then it goes into default after some time.” For example, for credit cards the date of first default is usually 180 days after a missed payment.
To answer your question - yes the SOL is generally based on the DoFD. There are some exceptions, for example Texas laws states that the SOL is to run from the date of last payment.
Thanks I am aware of that, the statement is not saying that it is stating the DOFD is the payment before it is charged off and I knew it was incorrect so I reposted to get an answer from our experts in the forum.
The problem is that the site you pulled that from is conflating their terms. "Date of First Default" is a meaningless term. The correct term is "Date of First Delinquency". That date is defined as the first missed payment leading to a charge-off, without any intervening period where its brought current. "Default" is simply the point at which the lender declares the full loan balance to be due and payable. That may or may not co-incide with a charge off or an initial delinquency. There is no "first default" because there are no subsequent defaults after that point - a loan only defaults one time, whereas delinquencies occur each time a payment is missed, until its declared in default..
Charge off - as Robert pointed out, is required by law to be done when the account reaches 180 days of deliquency for revolving and 150 days for installment.
Thats where my confusion began! Thanks again.