Rebuilding Your Credit

[Steve2967]

I have 2 credit cards with only a few hundred dollars listed as owed but are now in a "charged off" status.

I do not see that these have been assigned a debt collection company and they are not listed in any other way on my report.

Obviously I want to pay these off but, what is the best course of action to have a positive effect on my score?

[torchin]

What date did this report and what state do you live in?

[pizzadude]

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Steve2967 wrote:

I have 2 credit cards with only a few hundred dollars listed as owed but are now in a "charged off" status.

I do not see that these have been assigned a debt collection company and they are not listed in any other way on my report.

Obviously I want to pay these off but, what is the best course of action to have a positive effect on my score?

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A CO account is going to hurt your FICO score quite a bit, so your best option would be to negotiate a PFD agreement with the creditor;   they remove the account in exchange for payment.    You could also ask them to just remove the negative remarks from your report but that may be a less likely option than getting a PFD.

[Steve2967]

1 is from 9/2005 and 1 is from 4/2007. I live in Virginia

[Steve2967]

Is it suitable to negotiate a settlement for less than the balance and still expect a PFD?

[torchin]

I agree with the other poster on the second debt but I believe you are outside the scope of the statue of limitation on the first from 2005. If this is true, you don't technically owe this debt. I also believe after 7 years (any time now) it will no longer show on your credit report.

[pizzadude]

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torchin wrote:

I agree with the other poster on the second debt but I believe you are outside the scope of the statue of limitation on the first from 2005. If this is true, you don't technically owe this debt. I also believe after 7 years (any time now) it will no longer show on your credit report.

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SOL does not negate the debt ~ it only sets a period of time in which the creditor has to bring legal action against you.   Out of SOL debt can be collected on indefinately, just not in a courtroom after SOL.

[stan_the_man]

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pizzadude wrote:

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torchin wrote:

I agree with the other poster on the second debt but I believe you are outside the scope of the statue of limitation on the first from 2005. If this is true, you don't technically owe this debt. I also believe after 7 years (any time now) it will no longer show on your credit report.

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SOL does not negate the debt ~ it only sets a period of time in which the creditor has to bring legal action against you.   Out of SOL debt can be collected on indefinately, just not in a courtroom after SOL.

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Not disagreeing with you, but I believe I read somewhere that a state Attorney General was aruging that it was illegal to take any collection action on expired-SOL debt.

[pizzadude]

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stan_the_man wrote:

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Not disagreeing with you, but I believe I read somewhere that a state Attorney General was aruging that it was illegal to take any collection action on expired-SOL debt.

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It's certainly possible.   Actually NC has enacted legislation that essentially does just that ~ it makes out of SOL debt uncollectable.   But the NC "super~sol" is the exception and the only one that I am aware of.

[RobertEG]

Stan, you are correct in that there is a body of federal case law that holds that if a debt collector brings legal action on a knowingly time-barred debt (i.e., they have actual knowledge that SOL has expired), it is a violation of the FDCPA.

The debt is still owed, and expiration of SOL does not negate that fact... they just cant go use the courts as part of their collection practices if the are clearly aware that the SOL has expired.  I would be careful, however, in general application of that case law, as it presumes actual knowledge.  It is often not possible for a debt collector to be aware of actual expiration of SOL, such as if a state code includes reset provisions of which they have no knowledge.

For the most part, assume they can bring legal action, and you will still have to raise an SOL defense unless you have evidence of actual knowledge on their part.