Hello everyone. I know very little about credit and am having a hard time making a decision. I have about 7 years of credit history. About 5 years ago, I got myself into a little debt. I overdrafted my bank accounts ($600 and $150), and have an unpaid $650 home phone bill. All three of these debts are unpaid and have been on my credit for about 5 years now, and have been passed from collector to collector countless times. I once heard that un-settled debts eventually get removed from the report. Is this true? And if so, each time a new collector gets their hands on the debt, is it being renewed, or re-written to the reports again (starting from scratch) Would it be advisable to contact these collectors and settle the debts, or let it fall into place. Anyones advice is greatly appreciated. Thank you in advance. :D
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The first thing is where you are from. SOL (statutes of limitations) vay from state to stae. Some can range from two years to as many as ten. If your debt is not protected by the SOL you risk being sued for that debt. Can you tell us the state you are from? Also just because a phone bill was $650 a few years ago chances are it is more than tripple that amount now..especailly if it has been passed through a bunch of collectors.
A debt falls off your credit report after it has been on there for 7.5 years. So if you defaulted on a debt back in Jan. of 2000 you can expect it to fall off your report sometime in June of 2007.
I agree with fireyone, I would look at the statute of limitations and honestly anything that is past that I am not gonna pay because it continues to stay on your report. The collection agencies don't have the power to pull the original creditor or the other collectors off your report so the residue is still there. I paid off four last year and it is like I did not pay a dime, they are all still there in the negative column because I did not know to ask for pay for delete. But what good does pay for delete do if they can not remove the entire negative history.
Thanks for your responses. I am from CA. After reviewing my credit report, it looks like all three are scheduled to be removed April-Oct 2011. Like goodnatured said though, i am worried tht if i pay them, they will not be removed from my credit. Im probably better off letting them just fall off huh?
Yep Sky I know you probaly want to just get rid of them but honestly you open yourself up to being sued if you start paying on them. The SOL clock will restart and you will find yourself in the middle of debt collection heck. 2011 is a safer bet. Not only that I am sure by now they probaly want some astronomical amount for these debts and why pay such a high price. Just keep your credit on track by paying all your payments on time and in no time you will be back in businees. Thats your best protection...look to the future,
Hi Skyler
Outstanding debts will remain in your credit report for seven years and six months from the date you made the first missed payment. However, the creditors have the legal right to collect the debt till the time the SOL in your state has expired. SOL varies from 3 years to 10 years depending upon the state you signed the loan agreement and starts from the date of your first missed payment date. If the SOL has expired, you need not pay it back and the debt will come out of your report after seven years automatically. However, if the SOL has not expired, then you should take steps to pay back the debt.
Hi Skyler
Carol is right. If the SOL has not expired, then you should take steps to pay off the debt. For this you should first send DV letters to the creditors whose name is listed against your debt. If the creditors or the CA validate the debt within 30 days from the date of receipt of your letter then you should come to a repayment agreement to pay it off, else the creditors can bring judgment against you to recover the debt. However, if the SOL has expired, then you should not worry about the debt and at the same time you are not required to pay it back and the creditors have nothing to do to recover the debt. But if you pay off the debt after the SOL has expired, then the SOL will rewind and you may be required to pay off the entire debt.
be very careful when dealing with a debt with an expired statute of limitations, if you don't have the means to pay it off or make monthly payments, then leave a dead dog lie. I would not touch mine if I had it to do all over again, they are all paid off but still reflect negatively on my report.
I remember this nightmare of yours. I really wish they would find a way to inform people of their rights and if they decide ot pay they could remove. I was about to pay one of mine off so they would quit bugging a relative but decided it would not be a wise idea.