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I have a debt from a card I had in college that I completely ignored. To the point I dont even know who the collection agency is now. I've finally locked down my finances and I want to repay it, how should I go about it? I've used my one free annual credit report check about 6 months ago and I noticed that they just keep updating it. Probably been since 05ish that I have any sort of contact about this card. Any help would be appreciated, thanks
To know the name of the creditor or the collection agency to whom you owe the debt, you need to pull out your credit report and you will find their name against the debt. Send them a debt validation letter and wait for 30 days for them to validate the debt. If they can validate the debt, try to convince them for a pay for deletion agreement so that as soon as you pay off the debt, the negative item gets removed from your credit report and your credit score improves. If they agree to PFD, come to a repayment plan and pay off the debt.
Before paying off the debt, you should first check whether the Statute of Limitation on the debt has expired or not. If the SOL has expired, you need not pay off the debt and the creditor can do nothing to recover the debt. However, the negative item will stay in your report for seven years and six months from the date of your last payment towards the debt. But if you make any payment towards the debt after the SOL has expired, the SOL will restart and you will be liable to pay back the entire debt.
Can you tell us how old is your debt and your last payment towards the credit card debt and at the same time the name of the state from where you have obtained the card so that we can help you out in this forum.
Thanks for the info so far everyone. I don't think I have made a payment on that card since the spring of 05. I honestly dont know for sure, how terrible is that. Im in AZ and it was a citibank student card. Hope that helps.
In Arizona, the Statute of Limitation is 3 years for open ended accounts and since you have not made any payment towards the debt since 2005, the SOL has expired and the creditor cannot sue you to the court to recover the debt through judgment. However, the negative mark will stay in your credit report for 7 years and 6 months i.e, it will stay in your report till 2011 and affect your credit score.
So basically Kaplan will continue to report it on my credit score until 2011? Is there a way I can pay it off and get it removed from my report now? Im sure these are rookie questions but I would really like to get my credit back on track as this is the only real negative on my score. Thanks again everyone.
If you want to pay it off, you can do so and get the negative mark removed by pay for deletion agreement. But this pay for deletion agreement will help you to improve your score, only if the debt is still with the original creditor and has not been sold off to a collection agency. If the debt is sold off to a CA by the original creditor, you can get only the CA listing removed from your report and not the OC listing. In such cases it is better that you do not pay off the debt.