Looking for advice on how to proceed with a large debt that exceeds SOL

[Anonymous]

The really short backstory; I went to school on a private loan back in 2011. After one year of a 4 year program, they decided not to renew the loan. Debt $30k (I was young and stupid and got talked into a school I couldn't afford).

The shorter backstory; I was in a bad marriage and was the only income earner, and couldn't keep up with my loan payments, credit cards and rent all at the same time, so I stopped paying my loans.

Today: The date of last payment on the account was Dec of 2012 in the state of Nevada. From what I understand their SOL is 4 years, though I honestly don't know what this really means in the grand scheme. The debt was sold last month to a law firm that currently has at least one class action lawsuit against it for misrepresenting itself to people it was attempting to collect from (not sure if that matters, it's just the first thing I discovered when searching them). The debt has somehow gained $15k and is now $46k.

I am doing a lot better now, and am slowly paying off the credit card accounts. There's no way no how I'm coming up with 46k though and I'd like to be a real person again some day.

Any advice is greatly appreciated. I'm just getting started on this journey.

[RobertEG]

The owner of a delinquent debt is not prevented from continuing to attempt collection of the debt after expiration of the SOL.

They are, however,  prevented from obtaining a judgment by a court, which they can then use to attempt to forcibly collection via attachment of assets or garnishment of pay. 

Thus, you cannot legally be forced to pay.

You can decide not to pay, and they cannot obtain a judgment against you.  

If the debt has been sold to a debt collector, you can send them a cease communication letter under FDCPA 805(c), which will additionally require that the cease any further calls or letters to you.

Credit report exclusion is a totally different matter, and is not based in any way on the state SOL.

It is based only on expiration of the credit report exclusion period, which for a collection would be no later than 7 years plus 180 days from the date of first delinquency on the debt.

After credit report exclusion, others will not be able to find out about the delinquent debt by a pull of your credit report, and thus the delinquent debt is shielded from others.  However, it is not formally discharged, and if others become aware of it via other means, they might still consider it in any credit approval determination.

It looks like your date of first delinquency on the loan was in Jan, 2013.

That means that any collection reported on the defaulted debt must become excluded no later than July, 2020, regardless of whether it is paid or remains unpaid.

If the presence of the unpaid debt becomes known to and is raised as an issue bhy a prospective creditor, then you might consider payment in order to resolve that issue, but you are under no legal obligation to pay.

[Anonymous]

You just made my day much better, thank you Robert. Not by telling me I'm under no legal obligation, but by clearly explaining how this works

The only thing I don't fully follow,  come 2020 does the law firm holding my debt have to stop reporting because the original account is past 7 years, or can they continue to report their account for the next 7 years because they just opened it? I would assume that they need proof of the debt, which would also prove its age, as without that I would easily win a judgement.

I'm hoping that by paying off my other two delinquent accounts, along with an authorized user status in good standing, I can raise my credit score well enough to at least maintain one or two lines of credit in my own name.

[RobertEG]

A debt collector is required under FCRA 623(a)(5) to report the DOFD on the account that created the debt to the CRA no later than 90 days after they report their collection.

The CRA then monitors the time since DOFD, and must exclude any and all collections, regardless of when reported, from any credit report they issue after 7 years plus 180 days from the DOFD.  That is a date-certain that is independent of anything other than the DOFD.

The debt collector is not technically prevented from continuing to report/update after expiration of the exclusion date.

The requirement is placed on the CRA to exclude any reporting after expiration of the exclusion date, so any updated reporting would never see the light of day.  See FCRA 605(a)(4), as modified by FCRA 605(c) for determination of the fixed exclusion period.

Bottom line is that any collection, regardless of whether paid or unpaid, or when it is reported, or whether it is a second or subsequent debt collector, etc., is excluded based only on the reported DOFD.

DOFD is established under the OC account, and is thus not affected by actions of any debt collector other than their presumably accurate reporting of the correct DOFD to the CRA.