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Effect of Payment Plan on DOFD

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Valued Member

Effect of Payment Plan on DOFD

I have a situation wherein credit card was cancelled.  I was notifed that I was in default shortly thereafter (Statment reads:  "Disregard minimum payment due, your account is in default and the balance is due in full." (Aug. 2012) Subsequently, creditor allowed me to enter a payment plan and my payments were automatically deducted each month.  After almost two years on the plan, and still a balance of approx. $7k, the CA who was assigned to collect (they did NOT purchase the paper) suddenly and without warning stopped drafting my payments.  This caused a 30 day late on the payment plan, and I got back current on the PP immediately. (June 2014)  I later found out that the debt was taken back in house by the OC.    Until Jan. 2016, I made almost -  not all - payments on time ... a couple 30 day lates.  Fast forward to Jan. 2016, and I had health setbacks that ended with lost job and my health issue essentially caused me incapacitation.  Obviously, that was a disaster.  I am just now back to 100% in health and income.  I am wondering what the DOFD and ultimately the exclusion date would be?  I'm willing to settle and potentially PIF, but if this account is going to drop fairly soon I might think twice.  Hoping DOFD would be August 2012 in this situation, but I suspect it is not.  Creditor updates monthly from all 3 CRAs, and on one report shows an actual minimum due that by now is huge.

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Legendary Contributor

Re: Effect of Payment Plan on DOFD

Date of first delinquency is defined as the date the current period of delinquency began ("commencement of delinquency," see  FCRA 605(c)).

 

If, as appears to be the case in the posted scenario, an account becomes delinquent, and thereafter remains delinquent through any later reporting of any derog, such as a collection, charge-off, or monthly delinquency, then the DOFD remains the date of initial delinquency.

If you became delinquent in August, 2012, and thereafter have remained delinquent, the DOFD for exclusion of any collection or charge-off and the date of initial delinquency for exclusion of any later monthly delinquencies, remains unchanged, regardless of whether the debt remains unpaid, is paid, or partial payments have been made.

 

Any collection or reported charge-off would become excluded no later than 7 years plus 180 days from the DOFD, with the CRAs normally excluding at 7 years from DOFD.  FCRA 605(a)(4) as modified by section 605(c).

Any other monthly delinquencies would become excluded no later than 7 years from the date of initial period of delinquency.  FCRA 605(a)(5).

 

If the account itself still remains delinquent upon expiration of the credit report exclusion period, the entire account would become excluded by the CRA due to the exclusion provision of FCRA 605(a)(5).

 

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Valued Member

Re: Effect of Payment Plan on DOFD

Thank you for that explanation. I was probably not clear, but after my August 2012 default, I was put on a payment plan and made timely payments to the CA until June 2014, when I incurred a 30 day late. The CRAs are reporting exclusion dates of 2021 and even 2023 in one case. I want to make the argument that the entire TL should be removed by 8/2019 (+180 days?) because, given the original 8/2012 default, I was never truly current thereafter BECAUSE the creditor had already accelerated the debt and demanded PIF. Therefore, even if the assigned CA (who did not report because it wasn’t purchased) had accepted the payment arrangements, until I had made full payment to the OC, whether through the CA or otherwise, I couldn’t be considered anything other than delinquent. However, the OC did in fact report me as current while I was timely with the PP payments up to 2014, so I suppose I would have to argue that such reporting was not accurate, which would be awfully risky. Am I reaching here? Is my analysis flawed?
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Re: Effect of Payment Plan on DOFD


@dkendric wrote:
Thank you for that explanation. I was probably not clear, but after my August 2012 default, I was put on a payment plan and made timely payments to the CA until June 2014, when I incurred a 30 day late. The CRAs are reporting exclusion dates of 2021 and even 2023 in one case. I want to make the argument that the entire TL should be removed by 8/2019 (+180 days?) because, given the original 8/2012 default, I was never truly current thereafter BECAUSE the creditor had already accelerated the debt and demanded PIF. Therefore, even if the assigned CA (who did not report because it wasn’t purchased) had accepted the payment arrangements, until I had made full payment to the OC, whether through the CA or otherwise, I couldn’t be considered anything other than delinquent. However, the OC did in fact report me as current while I was timely with the PP payments up to 2014, so I suppose I would have to argue that such reporting was not accurate, which would be awfully risky. Am I reaching here? Is my analysis flawed?

If this account was COed then a DoFD was set and it cannot be changed ever no matter what payment arrangements might be made after the fact. I would contact the OC to get the true DoFD have them send you a letter as to its date then you can correct any errors that the CRA might have

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