Transforms, National collegiate, settlement

[Anonymous]

Good afternoon. I'll try to make this brief but give necessary details.

I had 4 student loans through national collegiate trust. They ultimately used transworld systems incorporated to collect the loans . The loan original loan amount was approximately 120,000 in total. NCT the original creditor sued me using Pollack Rosen law firm. In November of last year I settled before ttislfor 40 percent and now make a monthly payment to that law firm with a 10 year term. This was settled in  2017 and all paymenfs since have been on time. The law firm doesnt report payments but the plaintiff in the agreement was NCT. 

Transworld is still reporting these 4 accounts as open collections and updating their balances monthly and increasing the balances by 400 a month. This is making my credit report very bad as it has 4 open collections. According to my real credit reports these should all fall off in December 2019. These 4 accounts are my only derogatory accounts. 

I disputed these with both TU and EQ in June and now the tradelines say disputed but valid under FCRA. 

1. Should transworld still be reporting this as open accounts since I settled with the original creditor ?

2. Will these in fact fall off when the reports say.

3. Is there anything I can do to get these removed or at least reported as closed and settled with the OC?

Any other advice you can provide would be helpful too. Thanks so much for your time and insight.

[RobertEG]

Once a furnisher (creditor or debt collector) has reported information to a CRA, they are then bound by the provisions of FCRA 623(a)2), which requires that they promptly update that reporting as necessary to maintain its current accuracy.

It is not discretionary, and "promptly" is usually interpreted as being in their next regular reporting cycle.

They are thus not in compliance with FCRA 623(a)(2) if they are not updating to show your payments, and thus decline in the balance.

However, since you are making payments and have not yet discharged the entire debt, the collection is still "open," and thus I would not include lack of update to show closed as part of your dispute.

When you disputed, did the dispute include both the current balance and the open/closed status, or was it limited to the status only?

Once you receive verification of a dispute, you then obtain the right to bring civil action and contest the adequacy of the investigation of the accuracy of the item under dispute, so it is important that the balance was included as part of your dispute.

I would call the debt collector and remind them of the statutory requirment to update the balance, and give them until the next reporting cycle to do so.  If they still refuse to comply, you can bring civil action and compel them to do so.

[Anonymous]

Robert thank you for the reply. I have read and re-read what you wrote. I am not clear exactly what you mean in entirety. When I disputed on the transition and Equifax website I selected that I no longer owe this debt with the understanding that I settled with the original creditors. As there are 4 tradelines from transworld I did a seperate dispute for each indicating the above and for supporting documentation I attached a copy of the court settlement agreements with the original creditor national collegiate trust. I did this online dispute in June 2018. In August transworld changed the amount on the accounts but by September this had reverted to the original pre settlement amount and is now again assessing a 400 dollar a month increase. 

I am unclear from your post as to why they would continue to report any balance as I settled the account pre-trial with the original creditor ( national collegiate trust listed as plaintiff). I now make the monthly payment on the settled amount to the lawyers office who represented NCT.

It is also worth noting that the transworld tradelines are reflecting a payment in October when I have in fact never made payment to them. This also must be inaccurate correct? I am going to assume that I will likely have to accept the tradelines until 7 years after DoFD which was 2012  so they should go off in 2019 according to my official reports, but I don't understand why they are still showing open with a balance.

Was your suggestion that I need to call transworld and tell them that I settled with the OC and that they are violating the laws you had mentioned? Will this change the tradelines to closed if they comply? Will the entire tradeline still be removed in December 2019 if I pursue this course . 

Thanks again for your expertise. Apologies for typos as I am posting from a tablet

[RobertEG]

While you reached a settlement agreement, the debt remains until it has been paid.

You have not discharged the debt, you have agreed to terms of repayment which will, if completed, then discharge the debt.

Thus, until you make the final payment, you do still have a debt balance.

For example, if, at any time, you became in default of your payment contract, they could then pursue the unpaid debt balance.

[Anonymous]

I see. Does this will remain active on my credit report until the debt repayment period has elapsed or will it still fall off after 7 years from the date of first default to the OC?

[RobertEG]

Collections have a date-certain exclusion date that is based ONLY on the date of your first delinquency with the original creditor.

More specifically, a collection must be excluded from your credit report no later than 7 years plus 180 days from the DOFD.  The CRAs will usually exclude at 7 years from DOFD.

Payment or non-payment of the debt has no effect on the credit report exclusion date of their collection.

See FCRA 605(c).