Before reading the following you must understand that this is not intended as "credit repair" advice or as a way to get accurate information removed from your credit report. This information is provided so that as a consumer you understand your rights under FDCPA, FCRA, and any other consumer protection laws that are relevant. Per our Credit Repair Discussion Guidelines, we do not/are not recommending you to take any credit repair-related action for the sole purposes of removing/manipulating accurate credit data from your reports in order to manipulate your report or score.
Before knowing what steps to take, there is certain information you must know.
The first thing I suggest you do is obtain your free annual reports, if you haven’t already.
The following information will work for both non-medical and medical debts. You can also use the "HIPAA" process for medical debts only. You'll need to do an internet search for detailed information about this.
You need to know what the DoFD and your SOL is.
DoFD= Date of First Delinquency – This is the date of the delinquency that led to the collection/charge off status. This is NOT the first time you were ever delinquent on the account. It is the last time you got behind on payments and never again got caught up. If you are looking at your EX or TU report, it may not show DoFD, instead it will say “This account scheduled to remain until XXXXX” or something to that affect, subtract 7-7.5 years from this date and you will have DoFD.
SOL= Statute of Limitations—this is state based and sets the time limit the creditors have to sue you to recover their money. Now, they can sue after this time expires, but you must show up in court and use “expired SOL” as your defense and you win. Never ignore a summons just because you are past SOL. If the creditor arrives in court and you fail to show then you will lose a default judgement.
SOL generally begins running from DoFD and can be reset or tolled, depending on your state laws. If you have moved to a different state, both state’s SOL may come into play. Check here for simple state SOL.
CRTP= Credit Reporting Time Period—this is the length of time an item can remain on your credit report. The time is calculated based on DoFD. This time varies by different items. Read the CRTP thread for more information. If you are in NY, PAID collections/charge offs are removed 5 years from DoFD.
You then want to check your state statutes to see if your state requires a CA to be licensed and/or bonded. If your state does, check to see if the CA is licensed and/or bonded. If the CA isn’t in compliance with state laws, don’t disclose to them that you know this fact already. You don’t want to “show them all your cards”, keep this for back up ammunition.
If SOL has not expired and you can not PIF, then any action you take on the account will be at your own risk. It is advised not to wake a sleeping giant if you are within SOL and cannot PIF. Even if you do nothing, you can still be sued. You just don't want to put yourself out in the "spotlight" when you cannot PIF and it is within SOL.
The following information is intended for those who are dealing with accounts that the SOL has expired on or they can PIF.
The next important step is finding out who owns the debt, the OC or the CA?
If both the OC and CA are reporting, does the OC show a balance? When an OC sells an account, they have to report a $0 balance. If they still own the account, both the OC and the CA can report a balance.
If the OC still owns the account, I would call them first and ask if they could pull the account back from collections and allow you to PIF. If they agree then you need to pay them in full and then send the CA a DV.
If the OC doesn’t own the account, then the OC isn’t going to be able to do anything for you. You have to deal with the CA.
Send a DV letter CMRRR to the CA. (DV's are never sent to the OC). See this link. You then have to play the waiting game. A CA is under no time limit to answer a DV but all collection activity must stop until they do respond. If you happen to live in Texas you can file a "Notice of Inaccuracy" that compels a CA to respond within 30 days. Here is a link to the Texas Finance Code that covers debt collection.
If they validate properly and you agree with what they sent, then you would want to send a PFD letter. An example can be found here. It doesn’t need to be sent CMRRR. If you get no response or a negative response from your PFD letter, I would search the internet for the names of vice presidents, presidents, managers, etc and address the letter to them. Also look for email addresses and send via email. Google and the BBB are great places to look.
