topic Re: how do I handle zombie debt? in General Credit Topics

how do I handle zombie debt?

bethrn99 — Mon, 04 Oct 2010 21:21:07 GMT

I am trying to clean up some things on my credit so that I can apply for a mortgage in 6 months. It seems that suddenly, collection companies are coming out of the woodwork. I read on a credit repair company website that if a debt is past the statute of limitations, I should send a letter informing the collection company of this, request that they cease and desist and warn them that I will report them if they continue to attempt to collect. I have just received a notification from a collection company - this is my first notification of this debt that is over 5 years old. It has not posted to my credit account. I was going to ask for validation of debt then see if they will do a PFD to keep it off my report. Should I do the cease and desist method instead since it is not yet reported on my credit? what is the best way to handle this situation?

Thanks!!

Re: how do I handle zombie debt?

RobertEG — Tue, 05 Oct 2010 03:52:38 GMT

You dont want to raise expiration of SOL issues with them. It is irrelevant to credit reporting or alleged obligation of debt, unless you live in Texas.

SOL is your legal defense in the event of legal action brought by them. They dont know your SOL.

A collection agency has the right to continue collection activities forever, unless you do one of two things.

The temporary remedy it to send them a debt validation letter under FDCPA 809(b).

Did the CA send you a collection (dunning) notice? If so, you have 30-days from that date to send a DV letter, and make that a binding cessation of their collection activities untill such time as they choose to respond.

The second way to require cessation of collection activities is to send them a more binding C&D letter under FDCPA 805(c).

You can do both.

Neither of these bar them against bringing legal action.

FIRST know when your SOL expires. DVs and PFDs require no period for response, and could lead to legal action if your SOL is nearing, but has not yet expired.

Re: how do I handle zombie debt?

Anonymous — Tue, 05 Oct 2010 04:49:24 GMT

@bethrn99 wrote:
I am trying to clean up some things on my credit so that I can apply for a mortgage in 6 months. It seems that suddenly, collection companies are coming out of the woodwork. I read on a credit repair company website that if a debt is past the statute of limitations, I should send a letter informing the collection company of this, request that they cease and desist and warn them that I will report them if they continue to attempt to collect. I have just received a notification from a collection company - this is my first notification of this debt that is over 5 years old. It has not posted to my credit account. I was going to ask for validation of debt then see if they will do a PFD to keep it off my report. Should I do the cease and desist method instead since it is not yet reported on my credit? what is the best way to handle this situation?
Thanks!!

As Robert so aptly pointed out, SOL has little to do with credit reporting. Basically, the SOL has to do with the time period in which a creditor can sue you.

As for credit reporting, derogatory information can remain in most cases for up to 7.5 years. If there is a chance that a creditor will report derogatory information, a PFD may be a decent option.