Welcome to the board
As Cap-1 is reporting it monthly its keeping your Fico depressed. Check your states UCCs auto loans are governed by them there may be different time limits involved. You will need to settle it if you want the title and the amount you offer to do so is going to be different if its in or outside SOL so you need to nail that down first. Typically its going to take 60-75% of the amount owed inside SOL and 50% minimum outside SOL. If this is inside SOL do not contact them unless you actually have the cash to pay it no reason to raise a sleeping dog.
Federal regs require most lendors to charge-off loans after 120 days from initial date of delinquency.
That removes the unpaid loan balance from their receivable assets, thus reducing their statement of net assets that is basis for decisions by current shareholders and potential investors. However, taking of a charge-off does not affect continued obligation by the consumer for the entire debt balance.
If they additionally decide to repo the vehicle, that is a separate matter that, while taking the ability of the consumer to continue use of the vehicle, offsets the net debt balance owed. If they chose not to go through the time and expense of taking the vehicle, which may now be of such reduced value that it is not worth their time and expense, it simply affects your net remaining debt.
Your statement that your last payment was in Oct 2014 corresponds with the posting in your credit report of expected exclusion of the CO in 2021, which is approx 7 years from the date of first delinquency. That exclusion must occur regardless of whether the debt is paid or remains unpaid.
The apparent DOFD of approx 10/2014 also establishes, in most states, the begin date of running of the SOL.
If your state SOL statute uses the date of first delinquency, often also referred to as the date of cause of action, then a six year SOL would expire in approx 10/2020. However, unlike credit report exclusion, any partial payments will usually act to reset the SOL, so if you dont pay the entire amount or obtain an agreed settlement for less, then you might have an extension of the SOL period.
It is unclear as to what you mean by how you should deal with it.
Some will proffer that if it is a legit debt, you are morally obligated to pay.
Others may advise not paying if you can wait for seeking new credit until after the credit report exclusion date (10/2021) removes it from scorng, and the expiration of SOL removes the ability to bring civil action.
It is ultimately a personal decision......
Thank you! I have learned a great deal about credit and credit building from this community. Matter of fact it is what made me start looking at my own and trying to take steps to put myself in a better position. You guys are so helpful here!
I looked up the statue of limitations and it looks like auto loans are put under written contracts and as such have a SOL of 6 years, so if I am understanding correctly it would be best to wait until October/November of next year (since my last payment was in 10/14) before I start trying to work out a settlement with them because I am so close to the SOL. It is scheduled to fall off my credit completely in 2021 as per my experian credit report. Does that sound like the best course of action in my situation?
That might be a prudent move.
However, you can always, at any time, simply pay the delinquent debt, which automatically removes any issue of civil action, rendering moot any SOL issues.
If you decide to seek negotiations for a settlement prior to expiration of SOL, you are not in any peril of then obtaining a judgment if you are willing to pay the debt should they file a civil action.