Can a CA report a 10 year debt if I stop repaying it?

[Anonymous]

I'm so confused so please bear with me. I was contacted last year about a Capital One account I defaulted on about 10 years ago. The card had a $300 limit and the CA said I owed about $1000. I stupidly set up payment arrangements. Last month I took a serious pay cut at work and am not going to be able to make the payment this month. When I called them they said they would put it on my credit report and I would owe a lot more in interest etc. I'm working very hard to clean up my credit and don't want this to mess it up. It is not currently being reported on any of my reports. If they add this to my reports now would it really stay for the next 7 years? 

[guiness56]

Welcome to the forums!

If you defaulted on the account 10 years ago, no, they can not put it on your CR.  They are hoping you have no knowledge of the FCRA.

Depending on the state you are in, if you quit paying they could possibly get a judgment against you.  That would depend on several things. 

Was the account CO before it went to collections?

[Anonymous]

Thanks for the reply guiness56! NCO says they received the account in April of 2001 when I talked to them today. The account was already CO. I didn't think paying them was the wrong thing at the time, but the amount I've paid already makes me so angry when I think about it. After adding it up I've paid them over $1400 over the last 2 years. (Stupid me!) According to NCO I still owe about $250. The supervisor told me if I couldn't continue to pay they would continue to report it on my credit for the next 7 years (it's not being reported now) and that it would still accrue interest. I was pretty sure this was incorrect but I'm still fighting my instinct to just try and pay it to avoid damaging my credit. I've been paying my bills on time for over 5 years now and don't need any set backs. Thanks for any advice as to how to handle this company from here on out.

Message Edited by killiswillis on 02-17-2010 06:47 PM

[guiness56]

NCO is notorious for their tactics. 

But rest assured they can not report it on your CR.  They are so lying to you to scare you.  Items fall off your report 7 - 7.5 years from the DOFD.  If they got it in 2001 and it was already CO'd the latest it could legally report would have been 2008, if the DOFD was sometime in 2001.

I don't really know what to tell you as far as paying them.  You only owe them $250 and have been paying them for 2 years. 

Do you send in the money or does it come out of your debit or checking account?  (Not advised)

[Anonymous]

I thought that's the way it worked but of course she was saying all sorts of stuff to scare me. I'm all for paying what I owe as evidenced by NCO's crazy profit off of me on this account, but things are so tight now and something has to give. I did set up payments through my bank account. I'm just hoping it doesn't end up hurting me worse later.

[guiness56]

If you do not intend to make the payment it would be a good idea to tell the bank not to honor it if they try to take it out anyway.  It has happened before.

[RobertEG]

The FCRA never imposes any limitation on how long an OC or CA can report to a CRA.

FCRA 605(a) is not a limitation on reporting by a creditor.  It is a limitation on how long the CRA may continue to include derogatory information in a credit report they issue.

This may seem to be the same, but it is not.  FCRA 605(b) removes all of the restrictions set forth in FCRA 611(a) if you apply for any future credit transaction involving a principal amount of $150,000 or more.  Thus, derogs, regardles of when reported, derogs could remain forever in your credit file, and in some situations, be included in some credit reports forever.

If you have been making payments, I that you check out the possible affect on your state SOL,  Some states (not many) provide for reset of your SOL on debt if any payments are made.

[guiness56]

RobertEG:  This is a CA account and the FCRA most definitely imposes a timeline for how long it can stay on your CR.  That timeline has expired several years ago.  This account can not be entered onto the OP CR again, whether they continue to make payments or not.

[RobertEG]

FCRA 605(b).  "Exempted cases.

"The provisions of paragraphs (1) through (5) of subsection (a) of this section are not applicable in the case of any consumer report to be issued in connnection with

"(1) a credit transaction involving, or which might reasonably be expected to invlove, a principal amount of $150,000 or more....."

CRA inclusion of CA reporting is governed by FCRA 605(a)(4), as interpreted by FCRA 605(c), That falls within the exemption of credit reporting restirctions set forth in FCRA 605(b, which includes all provisions of FCRA 605(a)(1)-(5).  FCRA 605(a) thus does not set absolute limitations of inclusion in a credit report.

Message Edited by RobertEG on 02-17-2010 08:27 PM

[guiness56]

Collection accounts will not stay on your CR for over 7.5 years from the DOFD.