Do Unpaid Credit Cards Go Off Your Credit Report? (pay, collector, dispute)
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I have a friend who had to stop paying on her credit cards like three years ago because of a financial situation. The debt was bought off by collection agencies and they eventually stopped contacting her (she changed her phone number). I think she has like $10,000 worth of credit card debt. My question is, do these unpaid credit cards eventually go off her credit report after seven years or something? Should she attempt to pay it off once her financial situation improves? Or will her credit be screwed for a while regardless if she pays it off soon? Any advice would be appreciated.
It is my impression that collection agencies just don't stop contacting you, after all it is their business to collect the money (hence their name). Are you sure this is accurate information? It is possible she was sued for the money and lost in court (maybe didn't even show up?). Could they be garnishing her wages and she not know it?
A good start would be to have her pull her credit report and score and see what up.
^^^ I am not sure:
In general, the statute of limitations for a negative item to remain on your credit report, such as unpaid credit card debt, is 7 years from the date your account was charged off. Paying off your old delinquent debt, or negotiating a lower payoff, whether all at once or over a period of months, does not add any time to how long it stays on your report.
A collection account remains for 7 years + 180 days from the date the account was delinquent leading up to when it was placed for collection. After that time, it must be removed regardless of when it was paid, or when it was placed for collection.
However, you need to watch for duplicate collection accounts. http://blog.credit.com/2012/08/credi...double-damage/
Seven years is a long time to have a messed up credit report. I would rather contact the credit card company/bill collector, and seek an agreement. Some might reduce the debt if the rest could be paid cash.
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Quote:
Originally Posted by elnina
^^^ I am not sure:
In general, the statute of limitations for a negative item to remain on your credit report, such as unpaid credit card debt, is 7 years from the date your account was charged off. Paying off your old delinquent debt, or negotiating a lower payoff, whether all at once or over a period of months, does not add any time to how long it stays on your report.
A collection account remains for 7 years + 180 days from the date the account was delinquent leading up to when it was placed for collection. After that time, it must be removed regardless of when it was paid, or when it was placed for collection.
However, you need to watch for duplicate collection accounts. Credit Report Double Jeopardy Means Double Damage
Quote:
Seven years is a long time to have a messed up credit report. I would rather contact the credit card company/bill collector, and seek an agreement. Some might reduce the debt if the rest could be paid cash.
She should be aware of the collection statute of limitations (SOL) for her state before deciding to dispute what is reporting, or, before deciding to pay. If it's past SOL then she's no longer legally liable for the debt. Many states, though not all, allow the collection SOL to be re-set if a payment, or a written agreement to pay, is made. If she makes an agreement to pay, or pays, then the SOL is re-set and she would lose her SOL defense, if they sue they would probably win since she would no longer have the SOL defense. If it's SOL and she wants to pay then she needs to have the collector agree that with any lesser amount that she offers the account will be considered paid in full and that they will no longer continue collections or sell/trade/assign the debt, or the remaining portion of it. She should also have them agree to remove what they are reporting, and/or, to not verify any dispute she makes to the CRA's if they accept her payment.
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