I was talking to a friend of mine today about this site, she has a question about the 7 year deletion rule that I am not sure of how to answer, hopefully some of you out there know the correct answer I can give her. She had a collection from a phone company back in '97 it went on her credit reports, in 2000 she pulled her credit reports again and it was still there (which it should have been I told her) so she called the CA and made payment arrangements so it would show paid in full rather than the amount she owed. She said she only made one out of four payments to them and never paid another penny, so she basically defaulted on that agreement. She pulled her credit reports again and it's not on her reports anywhere and she didn't fulfill the payment arrangements. She wants to know if they are going to put it back on her reports showing that it's a collection as of 2000 when she defaulted on the payments to the CA which will prolong the 7 years or is the 7 years still from the DOLA with the OC, which means it can't be reported past year 2004. If anyone could help me answer this for her I would appreciate it, because I have no idea if her defaulting on the payment arrangement with the CA starts the 7 years all over for her.
Sorry, but I strongly suspect it does. I'm 3 months into "newbility" so rather than me screwing you up, let's see if someone more confident speaks up. <BUMP> for ya.
It can NOT be reported for more than the original year period. Paying on a charged off or collection account does NOT increase the time it is allowed to be reported. As for the SOL(statute of limitations) paying on it may have renewed the time they have to sue for it or collect on it. But the fact that they have never contacted her since she missed the payments, tells me they aren't going to bother her. Tell her to forget about it. From the FTC websiteay attention to (2) February 15, 2000 Ms. Alaina K. Amason 14155 Shire Oak San Antonio, TX 78247 Dear Ms. Amason: This responds to your letter concerning the time limitations imposed by the Fair Credit Reporting Act ("FCRA") on the reporting of chargeoff accounts by a consumer reporting agency ("CRA," usually a credit bureau). We list your inquiries on this topic below in italics, with our replies immediately following each item. 1. What reporting limits does the FCRA provide with respect to chargeoffs, and how long have they been in effect? Section 605(a)(4), which has been in effect since the FCRA became effective in April 1971, has always prohibited CRAs from reporting chargeoffs that are more than seven years old.(1) Section 623(a)(5), which became law in September 1997, requires a creditor that reports a chargeoff to a CRA to notify the agency (within 90 days of reporting the account) of "the month and year of the commencement of the delinquency that immediately preceded" the chargeoff. Section 605(c)(1) provides that the seven year period begins 180 days from that date. Both provisions were part of the major revision to the FCRA that were enacted in 1996.(2) 2. Is the reporting period extended if (A) the original creditor sells or transfers the account to another creditor, (B) the consumer responds to post-chargeoff collection efforts by making a payment on the debt, or (C) the consumer disputes the account with a CRA? Does it matter whether the 7-year period has expired when any of these events occurs? No. In enacting the new provisions discussed above, Congress intended to establish a date certain -- 180 days after the start of the delinquency that led to the chargeoff -- to begin the obsolescence period. It did so to correct the often lengthy extension of the period that resulted from later events under the original FCRA. Enclosed are two staff opinion letters (Kosmerl, 06/04/99; Johnson, 08/31/98) that discuss the impact of these provisions, and the legislative history relating to their enactment, in more detail. Because the commencement of the seven year period is now described with some precision by the statute, it is our opinion that none of the subsequent events you listed -- sale of the charged off account by the creditor, or a payment on or dispute about the account by the consumer -- changes the allowable period for a CRA to report a chargeoff. 3. Since Sections 623(a)(5) and 605(c)(1) provide new rules for calculating the 7-year period that became effective in 1997, do chargeoff accounts now have different obsolescence periods depending on when the chargeoff occurred? Yes. Section 605(c)(2) states that the section "shall apply only to items of information added to the (CRA) file of a consumer on or after" 455 days after enactment, or December 29, 1997. Therefore, a chargeoff reported to a CRA on or after that date is subject to the new commencement-of-the-delinquency method of calculating the obsolescence period set forth in Sections 623(a)(5) and 605(c)(1). On the other hand, a chargeoff reported to a CRA before December 29, 1997, is not covered by the new provisions, as discussed in one of the enclosed letters (Kosmerl, 06/04/99). If a credit account was reported as a chargeoff before that date, the Commission's view has been that it can be reported for seven years from the date the creditor actually charged it off.(3) The opinions set forth in this informal staff letter are not binding on the Commission. Sincerely yours, Clarke W. Brinckerhoff -------------------------------------------------------------------------------- 1. Section 605(b) provides that there is no time limit applicable to a report made in connection with credit involving a principal amount (or insurance with a face amount) of $150,000 or more, or employment for a salary of $75,000 or more. Prior to September 1997, those amounts were $50,000 and $20,000, respectively. 2. The Consumer Credit Reporting Reform Act of 1996 (Title II, Subchapter D, of Public Law 104-280, signed into law on September 30, 1996), made many other changes to the FCRA. 3. Commentary on the Fair Credit Reporting Act, 16 CFR Part 600 Appendix, comment 605(a)(4)-2. 55 Fed. Reg. 18804, 18818 (May 4, 1990).
Thanks for all of the info, I will definitely let her know, I am sure that she will be happy to hear this. I told her that if it did show back up on her credit report that we would just come back here for answers on how to handle it, lol. I am glad that I found this site it has been very helpful to me, I just hope that the advice on my RJM issue works out in my favor.
For some stupid reason I thought the account had been brought current and then defaulted on again. Sorry I made the useless noises there !
