Mortgage crisis still got plenty to go...

[Kulaf]

Right, and if she'd actually paid it off 8 years ago then it would have fallen off by now. If it's *still* an unpaid debt then it's not going to fall off (far as I know), and the mention that they still chase her for the money seems to indicate to me that it's still outstanding with no arrangements having been made. I could be way off base, but the only three ways I know of to clear the mark is to pay it off, come to some other arrangement with the company (also known as debt collectors come and take your stuff) or go bankrupt?

Dd

Q. How long can a CRA report derogatory information?
A. Seven years. There are certain exceptions:

Information about criminal convictions may be reported without any time limitation.
Bankruptcy information may be reported for 10 years.
Information reported in response to an application for a job with a salary of more than $75,000 has no time limit.
Information reported because of an application for more than $150,000 worth of credit or life insurance has no time limit.
Information about a lawsuit or an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer.

It is a violation of the Fair Credit Reporting Act for any creditor to continue to report on any debt 7 years after the last date of action. Simply selling the debt to another company is not sufficient. If she took the the initiative to file with the three credit agencies it would have to be removed by law.

[Ariannda Kusanagi]

Everytime i check the credit report, which is about once a year, the last date of action reported is fairly recent in relation to the card actually going into default. Like it'll say 2006 or 2007, which i guess is the reason it's still on my credit report ? I did file a dispute and i received a reply informing me (in the mail) that nothing had been removed, basically, or the credit agency had looked into it and found everything to be accurate or whatever

[Ariannda Kusanagi]

Everytime i check the credit report, which is about once a year, the last date of action reported is fairly recent in relation to the card actually going into default. Like it'll say 2006 or 2007, which i guess is the reason it's still on my credit report ? I did file a dispute and i received a reply informing me (in the mail) that nothing had been removed, basically, or the credit agency had looked into it and found everything to be accurate or whatever

[Embar Angylwrath]

Ari -

Time for you to get to know FCRA and the FDCPA. You have rights. Credit agencies are lazy. You have to keep on them, threaten them, write letters.. its a pain in the ass... I had to do it for my wife. What you need to do is request a "Debt Validation". It forces the credit agency to verify the entity reporting to them is the originator of the debt, not a business that bought the debt. (If you don't know the difference, say so and I'll explain it.)

Read through this page...

http://www.rebuildcreditscores.com/Debt_Validation.html

Good luck

[Ariannda Kusanagi]

Sorry about that I had an intrawebz hiccup !

Ahhhh gottcha Embar, thanks ! I was waiting on getting those settlement offers in the mail so that i could dispute the debt with them, but I'll start doing my research, getting the credit report and addresses and such and writing tomorrow =)

[Ddrak]

It is a violation of the Fair Credit Reporting Act for any creditor to continue to report on any debt 7 years after the last date of action. Simply selling the debt to another company is not sufficient. If she took the the initiative to file with the three credit agencies it would have to be removed by law.

If the credit card is still open, and has a balance of $4000 on a limit of $1500 then it's not a violation to report that fact. It's only a violation if the credit card company actually terminated the card and wrote off the amount more than seven years ago. From the description Ari gave, it appeared to me that the account was still active and not sold off to a collection agency. Of course, the description was rather sketchy and you're probably quite right assuming it had been sold off.

If, however, the account has been written off and sold out for collections then it should have fallen off after 7 years, and they can't legally come after you from 3-6 years after you became delinquent (depending on what state the account is in).

Personally I believe in financial responsibility and that includes paying debts rather than trying to get them quashed by loopholes which makes other people pay for my mistakes. Obviously others here don't hold the same values, but whatever.

Dd

[Kulaf]

I believe in personal responsibility......and that includes credit companies abiding by the law of the land. I guarantee that the debt she didn't pay has cost her way more than 4k over 7 years in lost opportunities. She paid the price of her mistakes with 7 years of that credit dogging her. We don't have debtors prisons anymore ya know.

[Ddrak]

Having bad credit in the US is far worse than most debtor's prisons ever were. Besides, debtor's prison still exists but only for a more restricted set of debts (try not paying alimony for a while and see what happens).

The debt not being paid costs everyone. There's a good reason credit cards have high interest rates...

Dd

[Ariannda Kusanagi]

the account was closed, and sent to collections in 2001 at the very latest. it's since been sold to multiple collection agency's. I didn't have the money, even with us both working, to pay off the debt amount, and i did stupid things like paying for groceries with the credit card, which is never smart I know. The original line of credit was 1500, i never maxed it out, but the mount, plus interest plus late fees etc etc etc is over 4k by now, and I certainly can't make a payment arrangement with the debt collectors, nor do i have the amount of money they're "willing to settle for" which is still more then the amount of the original debt !

would I have done things differently along the lines ? Of course ! But luckily I'm not in a TON of debt, but I am in enough with small amounts to screw me currently as far as my credit rating goes, and as I've already said if a job requires decent credit then I can't get it, in which case I don't have the money to be paying OFF the debts =p

[Embar Angylwrath]

Having bad credit in the US is far worse than most debtor's prisons ever were. Besides, debtor's prison still exists but only for a more restricted set of debts (try not paying alimony for a while and see what happens).

The debt not being paid costs everyone. There's a good reason credit cards have high interest rates...

Dd

Sort of, but in unequal ways.

If you ahve good credit, you get a lower interest rate on a card, which reflects the risk teh credit card company is willing to take on you. If you have bad credit, you get a higher interest rate, and may even be required to secure the card with a cash deposit, eliminating any risk to the credit card company.

Bottom line, the risk (cost) of defaults is factored in to the interest rate, and not all consumers have to bear the same interest rate, becasue not all consumers are equal in credit risk.

Theoretically? Yes, a default increases the cost within the "system". Practically? Ari's debt was less than the rounding error on that company's books.