DoLA compared to DoFD

[RobertEG]

DOFD has zero relevance unless the item being considered for CR exclusion is either a collection or a charge-off.

The only use of DOFD in credit reporting is for establishing the date the CRA uses for calculation the ultimate date of exclusion of a charge-off or collection.

Other items have their own specific CR exlusion dates, which, except for paid tax liens, run from the date of occurence of the adverse item.

Tax liens are the exception, with their exclusion date based on 7 years from the date paid.

[Booner72]

Wouldn't a bk be considerd a charge off?

So you are saying that the account stays til 10/12?

[Booner72]

Okay now I'm totally confused.  I thought ALL derogs were gone after 7.5 years EXCEPT ch 7 was 10 years?? 

[RobertEG]

No, a BK is unrelated to a charge-off.

When a consumer discharges a debt under bankruptcy, the creditor takes a 100% loss on the debt.  The debt is gone, and is no longer collectible.

When a creditor charges-off the debt, they simply do an internal bookeeping measure, moving the debt from col. A (a receivalbe asset) to col. B (a non-receivable business loss), thus reducing net assets and getting a tax reduction. The consumer still has 100% liability for the debt, and the account still has a potential value of the receivable debt, but due to its status as having been stated by the OC as being "uncollectible," is a high risk purchase.

Debt collectors can buy it at a reduced value based on its risk, and yet try to recover the entire debt.

From a consumer's perspective, they are night and day.  Owing 100% of the debt vs owing nothing.

[Booner72]

Robert - will the account stay until 10/12?

[RobertEG]

§ 605. Requirements relating to information contained in consumer reports [15 U.S.C. §1681c]

(a) Information excluded from consumer reports. Except as authorized under subsection (b)

of this section, no consumer reporting agency may make any consumer report containing

any of the following items of information:

(1) Cases under title 11 [United States Code] or under the Bankruptcy Act that, from the

date of entry of the order for relief or the date of adjudication, as the case may be,

antedate the report by more than 10 years.

(2) Civil suits, civil judgments, and records of arrest that from date of entry, antedate the

report by more than seven years or until the governing statute of limitations has

expired, whichever is the longer period.

(3) Paid tax liens which, from date of payment, antedate the report by more than seven

years.

(4) Accounts placed for collection or charged to profit and loss which antedate the report

by more than seven years.

(5) Any other adverse item of information, other than records of convictions of crimes

which antedates the report by more than seven years.

(6) The name, address, and telephone number of any medical information furnisher that

has notified the agency of its status, unless--

(A) such name, address, and telephone number are restricted or reported using

codes that do not identify, or provide information sufficient to infer, the

specific provider or the nature of such services, products, or devices to a

person other than the consumer; or

(B) the report is being provided to an insurance company for a purpose relating to

engaging in the business of insurance other than property and casualty insurance.

(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 credit report to be used in connection

with

(1) a credit transaction involving, or which may reasonably be expected to involve, a

principal amount of $150,000 or more;

 (2) the underwriting of life insurance involving, or which may reasonably be expected to

involve, a face amount of $150,000 or more; or

(3) the employment of any individual at an annual salary which equals, or which may

reasonably be expected to equal $75,000, or more.

(c) Running of Reporting Period

(1) In general. The 7-year period referred to in paragraphs (4) and (6)6 of subsection (a)

shall begin, with respect to any delinquent account that is placed for collection (internally

or by referral to a third party, whichever is earlier), charged to profit and loss, or

subjected to any similar action, upon the expiration of the 180-day period beginning on

the date of the commencement of the delinquency which immediately preceded the

collection activity, charge to profit and loss, or similar action.