I am trying to help my girlfriend straighten out some of her finances. Back in spring 2002 she had a car repossessed. She had got it through an auto auction so it was a good deal. She had it about 1 year when it was repossessed. Considering she had gotten a good deal and paid payments for a year, I am surpsied that she would have owed anything after the repossession. But Honda finance claimed she owed 3700. I am not clear on the history of the collection efforts, I just know that in late 2006 a CA from NY was sending letters offering a settlement for $1500 and listed the orignal amount correctly as $3700. They later stopped sending letters. A new CA from GA recently started sending letters and calling often. In early Oct 2007 they sent the standard letter claiming that if they don't hear anything within 30 days they will assume she owes the debt. Well she didn't send anything. She has talked to them and they have offered to settle for various amounts but the letters they send say things like "amount due = $4200, payment = $1300". We are convinced that if she pays the $1300, they will immediately say that it was just a payment and the debt was not settled. Also, as of summer 2007, the only listing on her credit report was Honda Finance (the original creditor). It listed the balance as $3700, that it was first listed on the credit report in 8/2002 and it was due to be removed from the credit report in 11/2009. I have some questions about her situations. 1) should we try the debt validation even though it is passed the 30 days from the first communication from the current CA? We would like to know who actually owns the debt (Honda or the current CA), how they came up with the $3700 that she owed after the repossession and other things like that, but everything I have read online about debt validation assumes that you are within the first 30 days. 2) even if she settles this debt, will it be removed from the credit report? Since the CA hasn't listed anything on there (only the original creditor) how will the CA have the power to remove anything from her credit report? Of course the CA says they can't remove it from the credit report, but I do not trust them. 3) I think the statute of limitations is 6 years in our state, so I think if she waits one year they can't even pursue this any more. However they are threatening lawsuits and it is making her nervous. 4) we are considering negotiating via written correspondence and asking for the it to be completely removed from her credit report, but we are not sure if we should start off with debt validation or just go straight for negotiating. 5) is there any way to find out who owns this debt? The CAs claim Honda Finance is their client. Would she be better off calling them or dealing with the current CA? Thanks for any help.
1) Perhaps. It won't afford you any statutory remedy but, they may comply. Also, ask Honda for verification of the account under FACTA. 2) Honda will stay. 3) Honda may sue, they may not. That is the chance you must be willing to accept. I would dispute their account tradeline in order to see if you could accrue some type of violation in the event you need to assert a counter to offset their claims. This is assuming they do sue you. 4) Honda will not remove this tradeline absent litigation. Put that out of your mind. However, if you do pay it at least you can rest assured you won't be getting a Summons and the tradeline won't report delinquent each and every month. 5) Honda still owns it. They don't typically sell bad debt and the CA's communication is indicative of such. In this situation, you may as well pay the CA insofar as Honda won't remove their tradeline anyway. 4)
Thanks for your help! So do original creditors never remove things from credit reports, or is it just that Honda in particular won't? I have read that paying off a debt won't help your credit score at all unless it is removed entirely. Is this true? If she deals with the CA and they send a letter saying the debt will be settled for a reduced amount, does this mean that they have the authority to settle for a lesser amount than what Honda claims it is owed ($3700)? We are just afraid of paying a smaller amount and then another CA coming along saying she still owes. So if she settles this and pays either the full amount or an agreed upon lesser amount, the Honda tradeline will remain, but 1) it will be not listed as delinquent, 2) the CA can't put anything negative on the CA, 3) she won't have to worry about being sued. Is this right? Thanks again.
Honda is one in particular. Evidence points to this being true. If you settle for a reduced amount. Do not do so without a written agreement that will indicate there is no balance remaining. 1) It would report as Paid Repo (or similar). It would still fall off your report in 2009. Nothing you do now will affect that date. 2) They *can*, absent an agreement otherwise, but one aspect of it reporting accurately, is that it must be removed from your report the same time the Honda tradeline comes off. 3) Correct
Thanks for your help. One last question. How likely is Honda to sue? It is a fairly large amount of money, but they have waited 5 years. One more year and they can't sue.
Correction: They can sue whenever they want. This year, next year, 20 years from now, etc. In one more year, your girlfriend can raise Statute of Limitations as an affirmative defense and move for a summary dismissal.
The decision to sue is a business decision that they make based on what they see as the odds of a) prevailing, and b) collecting. It will cost them money to sue, and they have to dedicate resources to the effort. I would think that after 5 years of waiting and doing nothing, it was below their radar. However, as the SoL approaches, they may just take a second look at litigation; and this may be what the CA activity is indicating. It is a gamble as to whether or not the SoL will run without their suing. I think the odds may be slightly in your girlfriend's favor on this. But even if they sue, the options of negotiating some sort of settlement are still open to her. A law suit is not the end of the world.
Reading back through this thread, I note that we haven't pinned the date that the SoL BEGAN to run. From the OP's initial statement, the car was repossessed in the spring of 2002, which means that the delinquency occurred before that. What is that date? Six year SoL would put the run date, then, as some time before spring of 2008. Spring's right around the corner. Time may run out for the CA on SoL before they know it.
She is in TN, not GA. The CA is in GA. They keep calling and saying things like "if you don't call back in 1 hour, there is no need to call back, because we will be turning it over to the legal dept". And then 2 days later they will call again and try to get her to call back. Also, the repo happened sometime in spring 2002. It showed up on the CR in 8/2002. But I thought that the SoL was always timed from something like 90 or 180 days from the first late payment (which was likely very early 2002). The credit report says the Honda repo listing will go away 11/2009 which is 7 years so I figured 11/2008 would be when the SoL would happen. But I am not sure at all about this.
No. The date a TL ages-off a CR is to 7 years (by statute) plus 180 days (by convention) from the date of first default. Date of first default, DOFD or DOFMD, occurs approximately 30 days after a payment is due and is missed; it is not reset (in most states) unless the account is made current. (The original purchase contract will generally define when it is considered to be in default.) So the DOFD is essential in determining when the SoL began and when it will expire. It has absolutely nothing to do with the published age-off date except as the age-off date is guideline for starting to think about the SoL in the absence of more specific data. Age-off dates are not always correct, as we have all come to understand. If the repo happened in April 2002, then the earliest that the DOFD could have occurred is March 2002 (unless there was absolutely minimum grace period). Most likely the owner of the debt spent some time trying to get payments, so the DOFD may well move into Feb 2002 or even January 2002. I think that you can see where I am headed with this. Let's say, for the sake of argument, that the DOFD was in Feb 2002. That means that with a 6-year SoL, it will expire in Feb 2008. As of that date GF has the affirmative defense of SoL should it come to a law suit. We're only talking 60-80 days from now. With GF in TN and the CA in GA, it may well take more than 2+ months for the CA to transfer it to an attorney in TN and for that attorney actually file a complaint. Waiting them out may well be an option. Calling them and stalling them may be another, but that will depend on how comfortable GF is in handling the stress of that type of conversation. At this juncture, I would think that establishing a firm DOFD would be essential in determining what the options are and which ones might best suit the situation.
The CR says the TL will age off in 11/2009. So since it is 7 years + 180 days wouldn't that mean DOFD is sometime in 5/2002? She says she thinks the repo happened sometime in spring though, and if DOFD was in 5/2002, I wouldn't think the repo would have happened until maybe 6/2002. She knows she was in college at the time so it couldn't have been 6/2002 because she would have been out for the summer.
There is no guarantee that the age-off date on the CR is correct. Only the calculations from the DOFD will determine the correct date. The dates you are offering are moving the DOFD into the March/April 2002 range. You and GF need to do some work to get to the DOFD or a reasonable understanding of when that might be. You may want to work it from both ends. January is winter, so the repo couldn't have been then. How about Feb? Same deal, still winter. Get her thinking of things she did in March/April 2002 that required the use of the car. Do it by the process of elimination if you can't document it. You may want to take the risk of stirring the giant by contacting Honda and see when they say the repo took place. DOFD is a key date in defining your options. Need to get it as accurate as you can.
Is Honda by chance reporting a detailed account history on any of her credit reports? You are looking for the dates of 30, 60, 90, etc. day lates. That may help you pinpoint when she stopped paying for the car.
Still another avenue: How did she pay? By check? EFT? Bank statements should show. No bank statements available? Call her bank. See if they have the records still available or can recall them fairly quickly from archive. Feb-Jun 2002 would be target months.
Don't be obtuse. You can't possibly expect a bank to have records from Feb-Jun 2002 unless the OP wants to pay big $ for them since they're going to have to get them off archivals. I'm with jlynn, the poster should use the date of delinquencies shown on the credit reports as a guide for when it was first delinquent.
GreatWhite makes a valid point . . . it is going to be easier to premise this off of the credit reports.
