topic Help Understanding Statute of Limitations and Credit Reporting for Old Debt (in Collections) in Rebuilding Your Credit

Help Understanding Statute of Limitations and Credit Reporting for Old Debt (in Collections)

Anonymous — Wed, 12 Feb 2020 16:28:43 GMT

Here are all of the relevant facts that I can think of (let me know if I missed anything):

My girlfriend had a credit card account with Barclays. At the time of account opening, and throughout the duration of the account, she was living in Maryland. She is now living in VA (and splits time working in MD/DC/VA).

Based on her Equifax credit report:

Account Status: Charge-Off

Charge Off Amount: $2,000

Current Balance: $2,900

Date of First Delinquency (DOFD): Dec 01, 2016

Date of Last Payment (DOLP): Jun 01, 2017 - This payment did not bring her account current - it only covered a small portion of the outstanding balance

She received a mildly worded letter from a law firm in late December'19 saying that they were looking to collect the money owed. As best I can tell this account was not sold off to a collections agency...the letter from the law firm implies that they are representing Barclays so does that mean Barclays decided to retain this outstanding debt instead of selling it to a collections agency?

Further Questions:

1. In terms of statute of limitations (for the law firm suing her), which states rules apply?

2. Assuming it's VA...as best I can tell the statute of limitations is 3 years?

3A. Do we count the 3 years from the DOFD or from the DOLP?

3B. Is the statute of limitations clock re-set by her partial payment in June?

4. In terms of this falling off her credit report, do we count 7 years from DOFD or DOLP?

Thank you so much for anyone that is able to clarify these questions!

Re: Help Understanding Statute of Limitations and Credit Reporting for Old Debt (in Collections)

Azuieldrago — Wed, 12 Feb 2020 17:30:07 GMT

@Anonymous wrote:
Here are all of the relevant facts that I can think of (let me know if I missed anything):

My girlfriend had a credit card account with Barclays. At the time of account opening, and throughout the duration of the account, she was living in Maryland. She is now living in VA (and splits time working in MD/DC/VA).

Based on her Equifax credit report:

Account Status: Charge-Off
Charge Off Amount: $2,000
Current Balance: $2,900
Date of First Delinquency (DOFD): Dec 01, 2016
Date of Last Payment (DOLP): Jun 01, 2017 - This payment did not bring her account current - it only covered a small portion of the outstanding balance

She received a mildly worded letter from a law firm in late December'19 saying that they were looking to collect the money owed. As best I can tell this account was not sold off to a collections agency...the letter from the law firm implies that they are representing Barclays so does that mean Barclays decided to retain this outstanding debt instead of selling it to a collections agency?

Further Questions:

1. In terms of statute of limitations (for the law firm suing her), which states rules apply? State she lives in.
2. Assuming it's VA...as best I can tell the statute of limitations is 3 years?
3A. Do we count the 3 years from the DOFD or from the DOLP?
3B. Is the statute of limitations clock re-set by her partial payment in June? Unfortunetly yes.
4. In terms of this falling off her credit report, do we count 7 years from DOFD or DOLP? DOFD

Thank you so much for anyone that is able to clarify these questions!

Thats all I know.

Re: Help Understanding Statute of Limitations and Credit Reporting for Old Debt (in Collections)

Anonymous — Wed, 12 Feb 2020 20:36:19 GMT

@Azuieldrago wrote:
1. In terms of statute of limitations (for the law firm suing her), which states rules apply? State she lives in.
2. Assuming it's VA...as best I can tell the statute of limitations is 3 years?
3A. Do we count the 3 years from the DOFD or from the DOLP?
3B. Is the statute of limitations clock re-set by her partial payment in June? Unfortunetly yes.
4. In terms of this falling off her credit report, do we count 7 years from DOFD or DOLP? DOFD

Thank you so much for anyone that is able to clarify these questions!
Thats all I know.

Not saying your info is wrong, because I truly don't know, but in researching this very subject on these very forums I've read information that claims the SOL is based on the state where the account went delinquent. Aka if you had an account in Dakota (there's only one in this example) and you moved to Carolina (there's only one) and then you went delinquent, Carolina's SOL would apply. But if you had the account in Dakota, and went delinquent in Dakota, and then moved to Carolina, Dakota's SOL would apply.

I'd super like to know for sure one way or the other, because I've read a lot here and nothing has clarified beyond a shadow of a doubt. I have one account that is either 1yr and 9 months past the SOL or 3 months from passing the SOL. 😳

Re: Help Understanding Statute of Limitations and Credit Reporting for Old Debt (in Collections)

FireMedic1 — Wed, 12 Feb 2020 20:41:26 GMT

The SOL is 6 yrs in VA. The SOL can be reset by making a payment. The fall off date from the CRA's will always stay the same. 7yrs 180 days from DoFD. Two separate things.

Re: Help Understanding Statute of Limitations and Credit Reporting for Old Debt (in Collections)

Anonymous — Wed, 12 Feb 2020 20:57:21 GMT

So based on the following article it states: "Open-Ended Accounts: An account with a revolving balance you can repay and then borrow again is open-ended. Credit cards, in-store credit, and lines of credit are all examples of open-ended accounts."

And then there is a state-by-state chart that lists VA as having a 3 year SOL for "open" accounts.

Is this info not correct?

https://www.thebalance.com/state-by-state-list-of-statute-of-limitations-on-debt-960881

Re: Help Understanding Statute of Limitations and Credit Reporting for Old Debt (in Collections)

Anonymous — Wed, 12 Feb 2020 21:08:55 GMT

I just did some further research and I'm finding a variety of answers depending on the source:

https://robertweed.com/2013/06/20/statute-of-limitation-in-virginia-for-credit-cards/

This attorney says "Five years if they can produce your signature on a written contract; otherwise three years. That’s in Code of Virginia 8.01-246(2) and (4)." Interestingly he also says "Also here’s the link to the Code of Virginia on restarting the statute of limitations. 8.01-229G. A partial payment, without an express promise, is probably not enough to restart the statute in Virginia."

Unfortunately when I click his 'Code of Virginia' link it does not go to a valid URL

On the other hand this source says "

Virginia has a statute of limitations of six years for nearly all debts, including written contracts, oral contracts and open-ended accounts such as credit cards. That means that once such a debt is six years overdue, creditors can no longer attempt to collect the owed money."

https://www.debt.org/faqs/americans-in-debt/consumer-virginia/

Anyone have a reliable source to actually figure out the correct SOL?

Re: Help Understanding Statute of Limitations and Credit Reporting for Old Debt (in Collections)

Anonymous — Wed, 12 Feb 2020 21:11:37 GMT

Also I was wondering, how can I tell if the law firm that sent the letter is just representing Barclays or if the law firm actually owns the debt.

Re: Help Understanding Statute of Limitations and Credit Reporting for Old Debt (in Collections)

OmarGB9 — Wed, 12 Feb 2020 21:32:42 GMT

I would consult an attorney to be honest to get a better answer about the SOL. As for who owns the debt, if the report is showing a balance with Barclays, but a law firm is contacting you about it, then most likely Barclays retains ownership of the debt and they simply hired a law firm to collect. If you want to be absolutely sure, though, I would call Barclays directly and ask.

Re: Help Understanding Statute of Limitations and Credit Reporting for Old Debt (in Collections)

FireMedic1 — Thu, 13 Feb 2020 00:14:40 GMT

I stand corrected. From a law firm in VA:

Virginia Statute of Limitations on Debt Collection

Statute of limitations assign a certain time after which suit may no longer be filed and a collector may no longer collect a debt from a consumer. In Virginia, during the time period in which an account remains open, and no payment is made on the account, a collector has a statute of limitations of 3 years from the date of last payment or last charge for goods or services rendered on the account to file suit against a consumer. If a debt is based on a written contract (non-Uniform Commercial Code) the statute of limitation period is 5 years.

I Google this: "statute of limitations VA credit card"

Re: Help Understanding Statute of Limitations and Credit Reporting for Old Debt (in Collections)

vntrsc — Thu, 13 Feb 2020 02:36:27 GMT

From the VA code:

§ 8.01-246. Personal actions based on contracts.

2. In actions on any contract that is not otherwise specified and that is in writing and signed by the party to be charged thereby, or by his agent, within five years whether such writing be under seal or not;

4. In actions upon (i) any contract that is not otherwise specified and that is in writing and not signed by the party to be charged, or by his agent, or (ii) any unwritten contract, express or implied, within three years.

Re: Help Understanding Statute of Limitations and Credit Reporting for Old Debt (in Collections)

Anonymous — Thu, 13 Feb 2020 21:47:12 GMT

So assuming the debt is still within the statute of limitations, what do you guys think is the best course forward? Try and negotiate a settlement with the law firm representing Barclays? If so, what percentage would you offer?

Re: Help Understanding Statute of Limitations and Credit Reporting for Old Debt (in Collections)

OmarGB9 — Mon, 17 Feb 2020 17:51:14 GMT

@Anonymous wrote:
So assuming the debt is still within the statute of limitations, what do you guys think is the best course forward? Try and negotiate a settlement with the law firm representing Barclays? If so, what percentage would you offer?

Yes and start low, around 20%. They'll most likely decline, but they'll also probably counter and just negotiate from there to something you can comfortably pay on.

Re: Help Understanding Statute of Limitations and Credit Reporting for Old Debt (in Collections)

Anonymous — Mon, 17 Feb 2020 18:05:56 GMT

Thanks, do you think it would be realistic to negotiate a PFD (pay-for-delete) on a negotiated amount. For example, lets say she agrees to pay 35% of the debt and they delete it from her report...or will they only do the PFD if she pays the full amount?

Re: Help Understanding Statute of Limitations and Credit Reporting for Old Debt (in Collections)

OmarGB9 — Tue, 18 Feb 2020 02:10:42 GMT

You can certainly try, but most likely IF they even agree to PFD in the first place, they'd want the full balance. Either way, if you can get them to agree, make sure you get it in writing. Good luck.

Re: Help Understanding Statute of Limitations and Credit Reporting for Old Debt (in Collections)

Brian_Earl_Spilner — Tue, 18 Feb 2020 02:20:49 GMT

@Anonymous wrote:
@Azuieldrago wrote:
1. In terms of statute of limitations (for the law firm suing her), which states rules apply? State she lives in.
2. Assuming it's VA...as best I can tell the statute of limitations is 3 years?
3A. Do we count the 3 years from the DOFD or from the DOLP?
3B. Is the statute of limitations clock re-set by her partial payment in June? Unfortunetly yes.
4. In terms of this falling off her credit report, do we count 7 years from DOFD or DOLP? DOFD

Thank you so much for anyone that is able to clarify these questions!
Thats all I know.
Not saying your info is wrong, because I truly don't know, but in researching this very subject on these very forums I've read information that claims the SOL is based on the state where the account went delinquent. Aka if you had an account in Dakota (there's only one in this example) and you moved to Carolina (there's only one) and then you went delinquent, Carolina's SOL would apply. But if you had the account in Dakota, and went delinquent in Dakota, and then moved to Carolina, Dakota's SOL would apply.

I'd super like to know for sure one way or the other, because I've read a lot here and nothing has clarified beyond a shadow of a doubt. I have one account that is either 1yr and 9 months past the SOL or 3 months from passing the SOL. 😳

Last I checked, they can sue wherever it's convenient for them. Where the contract, was created, where you moved to, a state they have an office in. @RobertEG would be able to tell you for sure, without doubt.

Re: Help Understanding Statute of Limitations and Credit Reporting for Old Debt (in Collections)

Anonymous — Tue, 18 Feb 2020 14:09:47 GMT

@Brian_Earl_Spilner wrote:
@Anonymous wrote:
@Azuieldrago wrote:
1. In terms of statute of limitations (for the law firm suing her), which states rules apply? State she lives in.
2. Assuming it's VA...as best I can tell the statute of limitations is 3 years?
3A. Do we count the 3 years from the DOFD or from the DOLP?
3B. Is the statute of limitations clock re-set by her partial payment in June? Unfortunetly yes.
4. In terms of this falling off her credit report, do we count 7 years from DOFD or DOLP? DOFD

Thank you so much for anyone that is able to clarify these questions!
Thats all I know.
Not saying your info is wrong, because I truly don't know, but in researching this very subject on these very forums I've read information that claims the SOL is based on the state where the account went delinquent. Aka if you had an account in Dakota (there's only one in this example) and you moved to Carolina (there's only one) and then you went delinquent, Carolina's SOL would apply. But if you had the account in Dakota, and went delinquent in Dakota, and then moved to Carolina, Dakota's SOL would apply.

I'd super like to know for sure one way or the other, because I've read a lot here and nothing has clarified beyond a shadow of a doubt. I have one account that is either 1yr and 9 months past the SOL or 3 months from passing the SOL. 😳

Last I checked, they can sue wherever it's convenient for them. Where the contract, was created, where you moved to, a state they have an office in. @RobertEG would be able to tell you for sure, without doubt.

Right, but that doesn't answer whose SOL applies after you've been sued. Even this article on wallethub isn't really sure:

The simple answer is that in most cases either the SOL for the state you live in now or the state you lived in when you entered into the credit card agreement will apply.

It basically says that the company suing you can decide which states SOL to use and then you have to defend against that action, hoping the state they chose (if it's different from the state where the debt was defaulted on) has precedent disallowing them from doing so.

Re: Help Understanding Statute of Limitations and Credit Reporting for Old Debt (in Collections)

Anonymous — Tue, 18 Feb 2020 21:53:02 GMT

So in this post the lawyer states a partial payment is probably not enough to restart the SOL: https://robertweed.com/2013/06/20/statute-of-limitation-in-virginia-for-credit-cards/

He included a broken link to the VA code...but I just went and manually dug up the section of VA law he references: § 8.01-229. Suspension or tolling of statute of limitations; effect of disabilities; effect of death; injunction; prevention of service by defendant; dismissal, nonsuit or abatement; devise for payment of debts; new promises; debts proved in creditors' suits.

I believe the relevant section can be found here:

G. Effect of new promise in writing.

1. If any person against whom a right of action has accrued on any contract, other than a judgment or recognizance, promises, by writing signed by him or his agent, payment of money on such contract, the person to whom the right has accrued may maintain an action for the money so promised, within such number of years after such promise as it might be maintained if such promise were the original cause of action. An acknowledgment in writing, from which a promise of payment may be implied, shall be deemed to be such promise within the meaning of this subsection.

That legalese is painful to read but i think the key point is that it specifically states "promises, by writing signed by him or his agent, payment of money on such contract, the person to whom the right has accrued may maintain an action for the money so promised, within such number of years after such promise"

and then it goes on to say:

"An acknowledgment in writing, from which a promise of payment may be implied, shall be deemed to be such promise within the meaning of this subsection."

So it seems pretty clear that they are saying the promise-to-pay must be in writing in order to trigger a restart on the SOL clock.

Re: Help Understanding Statute of Limitations and Credit Reporting for Old Debt (in Collections)

gdale6 — Wed, 19 Feb 2020 17:16:26 GMT

@Anonymous wrote:
@Brian_Earl_Spilner wrote:
@Anonymous wrote:
@Azuieldrago wrote:
1. In terms of statute of limitations (for the law firm suing her), which states rules apply? State she lives in.
2. Assuming it's VA...as best I can tell the statute of limitations is 3 years?
3A. Do we count the 3 years from the DOFD or from the DOLP?
3B. Is the statute of limitations clock re-set by her partial payment in June? Unfortunetly yes.
4. In terms of this falling off her credit report, do we count 7 years from DOFD or DOLP? DOFD

Thank you so much for anyone that is able to clarify these questions!
Thats all I know.
Not saying your info is wrong, because I truly don't know, but in researching this very subject on these very forums I've read information that claims the SOL is based on the state where the account went delinquent. Aka if you had an account in Dakota (there's only one in this example) and you moved to Carolina (there's only one) and then you went delinquent, Carolina's SOL would apply. But if you had the account in Dakota, and went delinquent in Dakota, and then moved to Carolina, Dakota's SOL would apply.

I'd super like to know for sure one way or the other, because I've read a lot here and nothing has clarified beyond a shadow of a doubt. I have one account that is either 1yr and 9 months past the SOL or 3 months from passing the SOL. 😳

Last I checked, they can sue wherever it's convenient for them. Where the contract, was created, where you moved to, a state they have an office in. @RobertEG would be able to tell you for sure, without doubt.
Right, but that doesn't answer whose SOL applies after you've been sued. Even this article on wallethub isn't really sure:

The simple answer is that in most cases either the SOL for the state you live in now or the state you lived in when you entered into the credit card agreement will apply.

It basically says that the company suing you can decide which states SOL to use and then you have to defend against that action, hoping the state they chose (if it's different from the state where the debt was defaulted on) has precedent disallowing them from doing so.

They can also use the state the creditor is incorporated in if its longer than either of these.

Re: Help Understanding Statute of Limitations and Credit Reporting for Old Debt (in Collections)

gdale6 — Wed, 19 Feb 2020 17:18:36 GMT

@Anonymous wrote:
So in this post the lawyer states a partial payment is probably not enough to restart the SOL: https://robertweed.com/2013/06/20/statute-of-limitation-in-virginia-for-credit-cards/

He included a broken link to the VA code...but I just went and manually dug up the section of VA law he references: § 8.01-229. Suspension or tolling of statute of limitations; effect of disabilities; effect of death; injunction; prevention of service by defendant; dismissal, nonsuit or abatement; devise for payment of debts; new promises; debts proved in creditors' suits.

I believe the relevant section can be found here:

G. Effect of new promise in writing.
1. If any person against whom a right of action has accrued on any contract, other than a judgment or recognizance, promises, by writing signed by him or his agent, payment of money on such contract, the person to whom the right has accrued may maintain an action for the money so promised, within such number of years after such promise as it might be maintained if such promise were the original cause of action. An acknowledgment in writing, from which a promise of payment may be implied, shall be deemed to be such promise within the meaning of this subsection.

That legalese is painful to read but i think the key point is that it specifically states "promises, by writing signed by him or his agent, payment of money on such contract, the person to whom the right has accrued may maintain an action for the money so promised, within such number of years after such promise"

and then it goes on to say:
"An acknowledgment in writing, from which a promise of payment may be implied, shall be deemed to be such promise within the meaning of this subsection."

So it seems pretty clear that they are saying the promise-to-pay must be in writing in order to trigger a restart on the SOL clock.

That is how I interpret it. The original clock starts with the OCs DoFD and runs continuously unless something tolls it or its reset by a new promise to pay in writing.

Re: Help Understanding Statute of Limitations and Credit Reporting for Old Debt (in Collections)

Anonymous — Wed, 19 Feb 2020 18:06:20 GMT

@gdale6 wrote:
They can also use the state the creditor is incorporated in if its longer than either of these.

So lets say the creditor is incorporated in California. They are allowed to sue her in CA, and we are required to travel to CA and show up in court?