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I have an account that on previous credit reports was listed as charged off/uncollectable bad debt. The debt was from 2005. Now, I received a collection agency notice indicating they want to collect. Can they do that even though it was previously listed as charged off?
Kylyn 969, Hello and welcome to credit magic. Just because a creditor lists a debt as a charge off/ uncollectable debt does not mesn you do not have to pay. It really means that the company (creditor) tried to collect from you and could not. You would still be responsible to pay. What is your state and the last payment you made on this debt? This information will let me know if you are protected by the statute of limitations.
Hi Kylyn,
When a debt is listed as bad debt/ charge off, it does not mean that the collection agency cannot claim the debt. You are still liable to pay the debt and the collection agency can collect if the debt is not past SOL. Which state do you live in? You need to know the statute of limitations (SOL) for your state. If the debt is past the SOL, the collection agency cannot sue you anymore. It also means that you should not start paying the debt now, because if you do so, you will restart the SOL clock.
I am confused! If you are still liable for the debt why does the creditor send it to CA. What course of action can a CA take that the creditor can't take? And if the SOL is up in your state why would a CA want to take it on? Wouldn't they check to see if the Sol was up in your state before taking it ? Does the CA buy your debt from the creditor, or does the creditor pay a CA to try to collect the debt for the creditor? If you talk to the CA does that start the SOL over, or do you have to start making payments to start it over?
Simple Truth,
Sometimes it is not worth the original creditors time to collect the account so they sell it off and claim it as a loss. The collection agency or the original creditor (if they did not sell the debt) can take you to court and get a judgment against you, attach your wages and also your bank accounts. Simple talking to the collection company does not reset the SOL. Making a payment will make the SOL clock start ticking again from the date they recieve the payment. This is why you should always check your states SOL .
Hi Simple,
Normally, the creditors turn the debt as a charge off when they are not able to collect the money form the debtor. Either it is an old debt, or the debtor is creating some sort of problem. Frankly, the creditors do not have so much time to contribute and moreover the collection agencies can use different means to collect the debt from the debtor which the creditor may not.
No normally, the CAs do not check it since all they want is the money. If they can confuse and obtain the money from a debtor, then it is their advantage. Not all debtors are aware of the SOL. In majority of the cases a CA buys the debt from the original creditor. You have to start making payments to reset the SOL clock.
I think it is bad that people are not aware of their rights, especially the statute of limitations. I am not saying this because I think its good that a person can get out of paying a debt. I say it because of all their astronomical fees and how a debt that was originally 500 dollars can quickly spiral out of control and end up being five times more than that.
This is one thing I wish they would change. A debt should never reach more than twice what was originally charge when the person defaulted. I believe a lot more people would take care of their over due debt if someone would control how much collectors and creditors could add to the debt with all the fees. Most people do not default because they simply do not want to pay..it is usually because they can not.
Debt collection along with taxes are subjects that people don't normally read into or study up on, it is one of those things that most of us tend to find out about the hard way.
I think that if all read the fine print first we would not get into some of the messes that we do. Usually we have no intention of getting into bad situations but due to circumstances beyond our control we end up there anyway.
That certainly sums it up. I use to be one of those who never read the fine print but more and more I find myself going there and looking it over. One thing they love to put into the fine print is the changing interest rates or the fact that if you miss one payment your interest rates go sky high. Always find the time to read the fine print.
you should read the book Debt Cure$ by Keving trudeau. it helped me alot. also there is a paper out "how to defend a Credit Card Case" by attorney Craig Jordan. good luck
my loan have been in collection and they still adding charges every month can they do that
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Hi Shanee,
I have answered to your query at http://www.creditmagic.org/collection/charge-fees.html#49191 .
If you have further queries, feel free to discuss in the forum.
Thanks,
Aaron