NY 5 Year rule on reporting Charged off accounts

[aot2009]

I know NY has a 5 year rule on paid charged off accounts that they must be removed.

What I'm trying to figure out is if that 5 years is from the FIRST MAJOR DEROG or from the date it's paid?

I've got something that's almost 6 yrs old that's charged off and the original creditor I can pay in full right now. Will the CB's delete once they update paid?

[MarineVietVet]

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@aot2009 wrote:

I know NY has a 5 year rule on paid charged off accounts that they must be removed.

What I'm trying to figure out is if that 5 years is from the FIRST MAJOR DEROG or from the date it's paid?

I've got something that's almost 6 yrs old that's charged off and the original creditor I can pay in full right now. Will the CB's delete once they update paid?

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Here is an excerpt from the NY FCRA and I read it to say it is 5 years from the date paid but others might disagree:

accounts placed for collection or charged to profit and loss which antedate the report by more than seven years; or accounts placed for collection or charged to profit and loss, which have been paid and which antedate the report by more than five years;

[aot2009]

Okay this is strange but Experian says if I paid the account in full today with the OC it would fall off in Aug of 2013.

But if I don't pay it in full it will fall off in July of 2013 ...

She says the original creditor allows the reporting company to remove it 3 months early if it's not paid.

First delinquent in Oct 2006

Charged off in Aug 2008

If paid in full will remove on Aug 2013

If not paid at all will remove on July 2013

[RobertEG]

You would think that the NYS legislators would have learned from the experiences of the federal FCRA.

The NYS language uses the identical language of FCRA 605(a)(4) by reference to the date "placed for collection or charged to profit or loss"

The meaning of the specific date of that ambiguous language was under dispute for years, requiring congress to ultimately amend the FCRA by the addition of section 605(c), defining once and for all that the pertinent date is the DOFD, and not any date pertaining to when the collection was reported.

The NYS statute does not include an equivalent section including the date-certain provisions of FCRA 605(c).  It would be a logical inference that the DOFD is the applicable date.

A clear anomoly would arise with a collection that has expired at 7 years plus 180 days from the federal DOFD, but 7 years had not expired from the NYS date of collection.

Since the NYS state statute does not supercede the fed FCRA, the fed FCRA would control.

Is there NYS case law that clarifies this apparent ambiguity in the NYS statutory language as compared to the Fed FCRA? 

[aot2009]

It's a mess Robert but in the end the NYS law didn't do jack for me and I was better off just letting this account ride off until next year.

What kind of incentive is it to pay the thing when it will push the date further into the future.

Pretty sad.

[atarvuzdar]

I would call back the credit bureau. There is a lot of confusion about the NYS law, and some frontline reps may not know of the statute since it's unique to NY, and therefore, isn't totally common. Ask for a supervisor if you have to. I live in NY and had my last paid derog fall off EXACTLY 5 years from the DOFD. Of course, that was a Federal loan that there is some discussion lately as to when those fall off even when paid, but in my experience it was precisely 5 years.

I also have a paid derog (also a Federal student loan) on my TU report that is set to fall off in August of 2012--again, 5 years from DOFD.

This is not to say that there is any agreement on the matter, even in the credit bureaus. It just means whoever decided when my personal derogs fall off when my report was reviewed (assuming the bureaus do this) interpreted the NYS statute to mean 5 years from DOFD.

I wish you much luck!

[aot2009]

I only called Experian but I will try to call TU and see what they say.

[aot2009]

Transunion says that the DOFD shows as October 13th 2006 and they go by the DOFD for NYS law. The first line rep had no idea what it was or that it even existed but the supervisor knew exactly what it was.

So if I paid this today and they updated it would have to be removed as soon as the original creditor updates the credit report?

[atarvuzdar]

Yes, presumably, but just be prepared to have to make another call once it updates and--again--speak to a supervisor.

[drkaje]

I had a paid CO and it automatically fell off Ex. EQ took calling until catching someone who understood what I meant regarding New York Law. TU, took speaking with someone in the US.