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Can debt go back on CR after sued during SOL?

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New Member

Can debt go back on CR after sued during SOL?

Hello,

I have a CA debt falling off my credit report. There is 3 years remaining on the SOL. The debt is high so I am assuming there is a good chance they will sue me.

If so, once they file suit can they start reporting again on my credit report?

If I can make a payment plan with them after they file suit but before going to court, would that stop it from going back on my credit?

If it goes to court and there is a judgement issued, would that go on my credit report as a new debt?

I know it's the same debt but not sure if any of these things would trigger it to go back on my report.

Hope that makes sense.

Thank you!

 

Message 1 of 6
5 REPLIES 5
Super Contributor

Re: Can debt go back on CR after sued during SOL?


@katatohaite wrote:

Hello,

I have a CA debt falling off my credit report. There is 3 years remaining on the SOL. The debt is high so I am assuming there is a good chance they will sue me.

If so, once they file suit can they start reporting again on my credit report?

If I can make a payment plan with them after they file suit but before going to court, would that stop it from going back on my credit?

If it goes to court and there is a judgement issued, would that go on my credit report as a new debt?

I know it's the same debt but not sure if any of these things would trigger it to go back on my report.

Hope that makes sense.

Thank you!

 


SOL and FCRA rules are incompatible - the FCRA rules of 7 years and 180 days from DOFD or whatever override SOL. 

 

The exception to this is if they get a judgment which will be put on your file as a public record and have a new clock. 



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Message 2 of 6
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Legendary Contributor

Re: Can debt go back on CR after sued during SOL?

Collections and charge-offs have a mandatory credit report exclusion period of no later than 7 years plus 180 days from date of first delinquency (FCRA 605(a)(4), as modified by section 605(c)), and any other derogs reported by the creditor, such as monthly delinquencies, must be excluded no later than 7 years from occurence (FCRA 605(a)(5)).

Those exclusion periods apply regardless of whether the debt is paid or remains delinquent, and are unrelated to state SOL for bringing civil action.

 

Thus, once excluded, then no, obtaining a civil action will not permit the creditor or the debt collector from reinserting account derogs of a collection.

 

However, if they obtain a civil judment, that is an entirely separate adverse item of information that has its own, separate exclusion provision based on 7 years from date of entry of the judgment by the court.  See FCRA 605(a)(2).

Thus, if a judgment is obtained and finds its way to your credit report, then yes, it can be included even if the exclusion period has expired for derogs reported by the creditor or a debt collector.

If the court proceeding does not result in actual award of a civil judgment, such as by your reaching a payment agreement, that will not result in the ability to reinsert derogs by the creditor.

Message 3 of 6
New Contributor

Re: Can debt go back on CR after sued during SOL?

Judgements would be placed on you're credit report.

 

Creditors try to stay out of court since its very expensive to do so.  I am sure you can look up certain Civil court cases in you're area that are probably in the same boat as you. Where I live the SOL is 3 years.

Message 4 of 6
New Member

Re: Can debt go back on CR after sued during SOL?

Thank you everyone!

That all sounds like what I was thinking.

 

That makes sense about the judgement starting a new event and therefore, a new 7 years.

 

The only thing I wasn't sure about is I thought I read that if you negotiate a payment plan, the clock starts over. That could be referencing something else. I will try to search more.

 

The SOL in WI is 10 years. Ugh.

 

 

 

 

Message 5 of 6
Legendary Contributor

Re: Can debt go back on CR after sued during SOL?

Yes, in many states, making payments or making a "firm offer to pay" can reset the statute of limitations.

However, as stated previously, SOL is unrelated to credit report exclusion, and credit report exclusion is not affected by payments or offers to pay.

 

Credit report exclusion is a requirment under the FCRA that prevents a CRA from continuing to include adverse items of information in credit reports they issue after expiration of the period set forth under secion 605(a).

 

Expiration of statute of limitations on debt refers to the period within which a party can seeking a civil judgment by a court.

Message 6 of 6
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