$9K Collections From RMS, Best Course of Action?

[Anonymous]

Hello, thanks for all the advice I've seen here. Yesterday Chase sent me an alert that I received a $9,000 derogatory credit collection mark on my CR from RMS (it's on my Experian CR report, not the other two yet). I know the debt is from a 2012 uni bill that has been sold once or twice. I had previously paid other companies, but have never paid this company and now it is collections because I ignored them.

I know I messed up; I haven't had any other credit issues and so my previously "excellent" current score is around 739 and going down because of this. [Experian reports my score as 670!] What do you suggest I do for the best and least expensive outcome?

I can't pay the entire bill due and since I have never spoken to creditors for longer than the followup call I don't want to call them up and say the wrong thing. I know I owe this, do I still ask them for validation? What I would most like is to pay a portion of the debt in exchange for a "pay for delete" end result to remove the derogatory mark as I look for a new apt (https://www.thebalance.com/sample-pay-for-delete-letter-960563). Will I have to pay taxes on the excused debt? (https://www.thebalance.com/tax-form-1099-c-for-reporting-cancelled-debt-960810) How can I calculate what I would owe on the excused debt?

I don't have much money so the "excellent" credit score was the selling point on my rental applications. I'm also up for a new job and terrified that they might run my credit report and see the $9k (total $11k in debt, bringing me to a whopping 23% credit utilization) and be like "Naw, pass", but I don't think I can do anything about that by the end of the month.

Thanks for any advice.

[FireMedic1]

It appears its past the SOL for legal moves depending on your state. But what is the DoFD. May be close to falling off completely.

[Remedios]

Hi and welcome to the forums 

@Anonymous  grab a copy of free annual credit report and see if you can find out either DOFD or projected removal date. 

If you really defaulted in 2012, it wouldn't be reportable any longer, so that date is really important when it comes to giving you advice on how to proceed 

[Anonymous]

@Remedios @FireMedic1 Thanks. I don't have the DOFD, but the projected Experian removal date is 2024. Experian says the collection was "opened" Mar 11, 2020.

[Anonymous]

I'm in NY. I have asked for a debt validation today, so perhaps I will receive more information.

[Remedios]

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@Anonymous wrote:

I'm in NY. I have asked for a debt validation today, so perhaps I will receive more information.

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If removal date is 2024, that would mean you defaulted in 2019, because it's my understanding for NY residents, negatives stay on CR for 5 years. 

Even if traditional 7 years were applicable,  that would put a default in 2017, which is quite different from 2012.

Do you recognize this debt? 

[Anonymous]

@Remedios It was sold a few times and I paid it sporadically until this year, so the clock must have been reset. I recognize it, but not the amount. My recollection has it at $7-8k, so I asked for an itemized validation of the debt.

[Remedios]

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@Anonymous wrote:

@Remedios It was sold a few times and I paid it sporadically until this year, so the clock must have been reset. I recognize it, but not the amount. My recollection has it at $7-8k, so I asked for an itemized validation of the debt.

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Reporting clock cannot be reset by collection changing CAs or by payments.

SOL could be, depending on the situation, but SOL and reporting period are not synonymous. 

Something is not right with that collection. 

Do you have any old reports showing when it was originally placed on your CR? 

I really think something is not right, as in someone reported inaccurate info.

Who was the original creditor? 

[Remedios]

Let me try this differently 

@RobertEG , how would inaccurate DOFD end up on CR (I'm making assumption that CA reported it as such), and how would OP go about it? 

Is this something that should start with dispute, and how does one prove that the account is older than stated? 

Thank you

[Anonymous]

@Remedios  @RobertEG  @FireMedic1 Thanks. I understand what you are saying. I did some digging. Here is the information as reported on my Experian CR. When I receive the validation letter I will have further info. I was incorrect about some of the info:

• The last time I could have paid the University directly was 2016/2017.

• As of Sept 2018 it was a debt of $9,277.68 with Reliant Capital Solutions Inc. I have paid a few hundred a few times to two different CAs between now and then. Not sure if that was the first time it was sold, but that is the first personal note I have as that's when I started attending to my personal finances.

• This debt has never been reported or appeared on my CR until last Sunday, July 12, 2020. I received bills, but I never paid out to this current company. I didn't receive/open a notice it was being sent to collections, my latest phone call attempt from a collection rep was Monday, July 6, 2020.

• Experian Report:

Date Generated: Jul 14, 2020

Account Name RECEIVABLE COLLECTION SE

Account Type Collection

Responsibility Individual

Date Opened 03/11/2020

Status Collection account.

Status Updated 06/30/2020

Balance $9,343

Balance Updated 06/30/2020

Recent Payment $0

Monthly Payment $0

Original Balance $9,343

Highest Balance $0

Terms 1 Months

On Record Until Aug 2024