Re-aging an Account in a Debt Management Program

[Anonymous]

I have entered a debt managment program. However, (unfortnaley) I was 2 months delinquent when I entered the program. The account was reported closed, and is being reported delinquent each month until the account is re-aged after 3-4 consecutive payments. In total, there will 5-6 late payments reported by the time the account is re-aged.

My question is, how will the re-aging process be reported to the credit agencies when in a debt managment program? Will all the delinquent payments be removed, will only those delinquent payments be removed that were reported after acceptance into the program, or will none be removed and the account only reported current once re-aging occurs?

I cannot get a straight answer from the credit counselor so I am hoping to hear from somebody who has some familiarity with these kinds of programs.

Thank you!

[sjt]

It depends on the DMP and the individual banks. One in California, reages after you make 3 consecutive monthly payments.

Check with the DMP administrator to see how they reage.

[Anonymous]

Thank you for your response. I have asked the credit conselor, but I get responses similar to yours. My question is after re-aging, how is the account reported to the credit agency? Do all of the late payments drop off?

[sjt]

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@Anonymous wrote:

Thank you for your response. I have asked the credit conselor, but I get responses similar to yours. My question is after re-aging, how is the account reported to the credit agency? Do all of the late payments drop off?

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Yes the late payments would drop off as if they never occured.

[sjt]

Something else I wanted to add. Generally the late payments removed are within a certain timeframe from the time you entered the program. example, they wont remove late payments 5 years prior to the date you entered the DMP program.

[Anonymous]

Edit: Just saw your reply. Thank you. There were two late payments prior to being officially accepted into the program. Do you think they will fall off as well?

[sjt]

I don't quite understand the question.

When they agree to adjustments after specific amount of time or payments made, it starts when the The creditors receive the first payement.

[Anonymous]

I meant if the account was already two months late when I entered the DMP, then by the time the account is re-aged (which will take this company 3-4 months), the account will be reported as 5-6 months late. The question is, when the account is re-aged and brought current, will all these late payements be knocked off (5-6 late payments) or only the late payments that occured once the company had agreed to the DMP (which would be 3-4 late payments). Thank you!

[RobertEG]

The normal exclusion of delinquencies is done by the CRAs based only the date of the delinquency.  More specifically, the CRA monitors time from date of the delinquency, and excludes no later than 7 years from the date of the delinquency.

A debt management program is a separate contract between the creditor and the consumer, and any removal of derogs is based upon reporting of deletion by the creditor based on terms of that contract, and is NOT based on any exclusion done the CRA.

If the terms of your program include deletion provsions, then required deletion is by way of enforcement of your contract with the creditor, and not by way of any reset by the CRA of the exclusion period/date governed under the FCRA.

What are the specific and agreed provisions of your debt management contract?

[Anonymous]

The company sent me terms that were very vauge, and said that the account will be re-aged to be current once three payments have been made on time after the DMP was accepcted by the company. I am trying to figure out how this will be applied to my account.