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New Member
hydra11
Posts: 4
Registered: ‎05-05-2011

question about old debt (palisades collections)

i'm in the process of buying a home, and while my credit score itself is good (770), my credit report has a blemish on it.  there's an old ATT cellphone debt (collections posted date is 4/06) that i was told must be paid off (or settled), otherwise i wont be able to get a home loan.  i acknowledge this debt is legitimate, however i do not agree with the debt amount (my guess is the amount claimed had penalties/interest tackled upon the actual debt amount).  i have several questions:

 

1. because i know this debt is legitimate, i dont think i need to ask for a DV letter, right?

2. i've read some posts, and there is a reference to a 2-yr SOL for cellphone debts, is this true?  does that mean for my situation, i can ask the credit bureaus (EQ, EX, TU) to remove this from my report?

3. assuming #2 is not true, should my next step be to contact palisades and try to settle with them for a PFD?  if so, how much should i ask to settle for (e.g. 15c on the dollar)?  the debt amount is $390 and it's 5-yrs old (4/06).  as i mentioned before the "true" debt (sans penalties/interest) is probably only half that amount.

Moderator Emeritus
llecs
Posts: 32,880
Registered: ‎08-04-2007

Re: question about old debt (palisades collections)


hydra11 wrote:

i'm in the process of buying a home, and while my credit score itself is good (770), my credit report has a blemish on it.  there's an old ATT cellphone debt (collections posted date is 4/06) that i was told must be paid off (or settled), otherwise i wont be able to get a home loan.  i acknowledge this debt is legitimate, however i do not agree with the debt amount (my guess is the amount claimed had penalties/interest tackled upon the actual debt amount).  i have several questions:

 

1. because i know this debt is legitimate, i dont think i need to ask for a DV letter, right?

2. i've read some posts, and there is a reference to a 2-yr SOL for cellphone debts, is this true?  does that mean for my situation, i can ask the credit bureaus (EQ, EX, TU) to remove this from my report?

3. assuming #2 is not true, should my next step be to contact palisades and try to settle with them for a PFD?  if so, how much should i ask to settle for (e.g. 15c on the dollar)?  the debt amount is $390 and it's 5-yrs old (4/06).  as i mentioned before the "true" debt (sans penalties/interest) is probably only half that amount.


Your 770 score is pretty good given a CA reporting. Some lenders care about old, unpaid debts and some do not.

 

1) Since a CA is reporting (Palisaides), your first step would be to send a DV. I would also contact AT&T and ask for the last couple of bills.

 

2) Know that there are two terms: SOL and CRTP. SOL is the time frame a creditor has to sue and that is typically set by state law and can easily vary from 3 yrs to 15 yrs depending on the state and debt type. CRTP is the reporting time period of a debt and that is always 7-7.5 years for examples like this and that is set by federal law via the FCRA. The clock for reporting starts ticking at the date you first went late and never recovered (DOFD) and would be prior to 4/2006 in your case. IMO, the SOL on a cell is not 2 yrs. The federal statute in question was written before cell phones were invented (I think the first draft was 1938). And I've seen some examples of folks being sued beyond 2 yrs for cell phones, though I don't know if the supposed 2yr-SOL had been contested in those cases. I know you were referring to CRTP, but thinking aloud.

 

3) Wait for their response to the DV and AT&T's bill copies. If you agree with them, then send a PFD letter. You can always offer a settlement for the amount you think you owe.

New Member
hydra11
Posts: 4
Registered: ‎05-05-2011

Re: question about old debt (palisades collections)

 


llecs wrote:

hydra11 wrote:

i'm in the process of buying a home, and while my credit score itself is good (770), my credit report has a blemish on it.  there's an old ATT cellphone debt (collections posted date is 4/06) that i was told must be paid off (or settled), otherwise i wont be able to get a home loan.  i acknowledge this debt is legitimate, however i do not agree with the debt amount (my guess is the amount claimed had penalties/interest tackled upon the actual debt amount).  i have several questions:

 

1. because i know this debt is legitimate, i dont think i need to ask for a DV letter, right?

2. i've read some posts, and there is a reference to a 2-yr SOL for cellphone debts, is this true?  does that mean for my situation, i can ask the credit bureaus (EQ, EX, TU) to remove this from my report?

3. assuming #2 is not true, should my next step be to contact palisades and try to settle with them for a PFD?  if so, how much should i ask to settle for (e.g. 15c on the dollar)?  the debt amount is $390 and it's 5-yrs old (4/06).  as i mentioned before the "true" debt (sans penalties/interest) is probably only half that amount.


Your 770 score is pretty good given a CA reporting. Some lenders care about old, unpaid debts and some do not.

 

1) Since a CA is reporting (Palisaides), your first step would be to send a DV. I would also contact AT&T and ask for the last couple of bills.

 

2) Know that there are two terms: SOL and CRTP. SOL is the time frame a creditor has to sue and that is typically set by state law and can easily vary from 3 yrs to 15 yrs depending on the state and debt type. CRTP is the reporting time period of a debt and that is always 7-7.5 years for examples like this and that is set by federal law via the FCRA. The clock for reporting starts ticking at the date you first went late and never recovered (DOFD) and would be prior to 4/2006 in your case. IMO, the SOL on a cell is not 2 yrs. The federal statute in question was written before cell phones were invented (I think the first draft was 1938). And I've seen some examples of folks being sued beyond 2 yrs for cell phones, though I don't know if the supposed 2yr-SOL had been contested in those cases. I know you were referring to CRTP, but thinking aloud.

 

3) Wait for their response to the DV and AT&T's bill copies. If you agree with them, then send a PFD letter. You can always offer a settlement for the amount you think you owe.


i was as shocked as anyone when i heard my score is now 770 because in early january it was 695.  i know this because that's when i had to get approved for a car loan.  not that i'm complaining, i just have no clue how it could have shot up 75 pts in only 4 months.  i payoff my credit cards every month, but i didnt think doing so would help my score so much so quickly. 

 

it seems that given my situation, unless i can find a lender who doesnt care about a 5(+) yr old debt, it looks like i need to settle the debt, one way or another.  i do have a few follow-up questions:

 

1. what's the purpose of asking for a DV if i already know this debt is accurate (although the amount in question is what i have doubts on)?

 

2. i've heard collection agencies buy debts from creditors for pennies on the dollar.  if that's true, is there a settlement percentage u can recommend i offer them?  i'm willing to PIF if i must, but i dont see why i should if for instance i can settle for say, 10% of the debt.  is there a ballpark settlement percentage range u can recommend for me?  20%?  30%?  50%?  i dont want to lowball them and not get a reply back as a result of my lowball, but i also dont want to settle for higher than i need to.  any suggestions?

Mega Contributor
RobertEG
Posts: 17,333
Registered: ‎03-19-2007

Re: question about old debt (palisades collections)

[ Edited ]

Technically, you cant DV a debt collector under FDCPA 809(b) unless you dispute the debt, in whole or in part.  That is a statuory requirement.

Having said that, I have never seen a debt collector hold a DV request to be improper because it did not state that the debt was disputed.  It is probably not considered by them to be of any advantage to require you to dispute.

Most DV leters that I have seen dont even include a statement that the debt is disputed, in whole or in part.  And the term "dispute" as used in FDCPA 809(a) is not the same as a dispute of inaccurate credit reporting uder the FCRA.  All that is required under the FDCPA is that you include the word "dispute." No supporting documentation is required, as is necessary if you dispute under the FCRA.

Aside from getting a statement from the debt collector of the asserted and current amount of the debt, a DV gives the name of the OC, if there is any uncertainty, and gets the debt collector on record as asseting collection authority.  Anyone can call and assert themsleves as a debt collector.  You might want to get validation in writing.

The final reason to send a DV is that, if it is timely, it blocks their ability to continue collection of the debt until such time as they provide validation.  That temporarily blocks them additional credit reporting, and from calling you.

If any of those other reasons are applicable to you, then a DV letter would have some merit.  Otherwise, if it accomplishes nothing for you, dont bother.

New Member
hydra11
Posts: 4
Registered: ‎05-05-2011

Re: question about old debt (palisades collections)

i looked at my old credit report (pulled in january this yr), and noticed a discrepancy.  my old AT&T cellphone debt listed on EX is shown to be removed by March this yr ("this account i scheduled to continue on record until Mar 2011"), but on the TU report, it says it's scheduled to be removed this month ("Estimated date that this item will be removed: 05/2011").  obviously the loan broker who pulled my credit a few days ago sees i still have this old debt, but my question is why is EX showing an "expiration date" of March while TU is showing May?

 

more importantly, if my credit report is pulled again in june, will this old debt be vanished from TU's records?  note: i didnt keep my EQ report, so i dont know what it says this debt is suppose to vanish from EQ's records.

Moderator Emeritus
llecs
Posts: 32,880
Registered: ‎08-04-2007

Re: question about old debt (palisades collections)


hydra11 wrote:

i looked at my old credit report (pulled in january this yr), and noticed a discrepancy.  my old AT&T cellphone debt listed on EX is shown to be removed by March this yr ("this account i scheduled to continue on record until Mar 2011"), but on the TU report, it says it's scheduled to be removed this month ("Estimated date that this item will be removed: 05/2011").  obviously the loan broker who pulled my credit a few days ago sees i still have this old debt, but my question is why is EX showing an "expiration date" of March while TU is showing May?

 

more importantly, if my credit report is pulled again in june, will this old debt be vanished from TU's records?  note: i didnt keep my EQ report, so i dont know what it says this debt is suppose to vanish from EQ's records.



It's not uncommon to have varying drop off dates, and is OK so as long as it drops off between the 7 to 7.5 yrs (if not sooner). EX always drops it a little later than what it says, but TU is pretty good for their word. I'd pull TU again in a couple of weeks and I bet it'll be gone. EQ doesn't list a drop off date unfortunately.

 

 

New Member
hydra11
Posts: 4
Registered: ‎05-05-2011

Re: question about old debt (palisades collections)

 


llecs wrote:

hydra11 wrote:

i looked at my old credit report (pulled in january this yr), and noticed a discrepancy.  my old AT&T cellphone debt listed on EX is shown to be removed by March this yr ("this account i scheduled to continue on record until Mar 2011"), but on the TU report, it says it's scheduled to be removed this month ("Estimated date that this item will be removed: 05/2011").  obviously the loan broker who pulled my credit a few days ago sees i still have this old debt, but my question is why is EX showing an "expiration date" of March while TU is showing May?

 

more importantly, if my credit report is pulled again in june, will this old debt be vanished from TU's records?  note: i didnt keep my EQ report, so i dont know what it says this debt is suppose to vanish from EQ's records.



It's not uncommon to have varying drop off dates, and is OK so as long as it drops off between the 7 to 7.5 yrs (if not sooner). EX always drops it a little later than what it says, but TU is pretty good for their word. I'd pull TU again in a couple of weeks and I bet it'll be gone. EQ doesn't list a drop off date unfortunately.

 

 


unless i'm mistaken, it appears since i'm very near where this old debt will naturally vanish from my credit report, it makes little sense to try and payoff/settle with the CA as i believe a turnaround time for settlement is about 3-wks anyway.  i might as well sit tight until june when it should disappear on its own.

 

so if in june i have my credit report pulled again, if i see the debt is gone from TU but still there for EX or EQ, what should i do?  is the proper procedure as simple as calling EX/EQ and asking them to remove it due because it's now over 7-yrs old?


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