Discussion in 'Credit Talk' started by Om, Aug 29, 2001.

  1. Om

    Om Well-Known Member

    From what date does the clock start ticking? Or should I say is supposed to start?
    Is it from the date the account was opened?
    From when it was closed?
    From when the account turned negative?
    From the last reporting date?

  2. sam

    sam Well-Known Member

    pretty much the date of the charge off first occurred.

    but if you make any payments thereafter, then that date.

    Some banks can hold your account open for a long time..
  3. Tuit

    Tuit Well-Known Member

    I think that the time starts 180 days after your first delinquent payment. This is just my opinion but I think that if you let's say missed May June and July payments, were able to pay some in July but then were not able to pay anymore after that and never got the payments caught up from the first late payment in May, then the 7 years would begin 180 days from the first delinquency in May.

    I think you would re-start the 7-year clock if you then made a payment after charge-off or if you made a payment to a CA bc you would be re-affirming the debt. Again this is just my opinion.
  4. roni

    roni Well-Known Member

    Sorry, but I disagree. They may try to reage the debt if you make a payment by claiming it is a new line of credit, but if the account numbers are the same, payment does not legally extend the timeperiod or reage the debt. Doesn't mean that a collection agency or orginial creditor will not try to do it, but legally, they can not.
  5. Tuit

    Tuit Well-Known Member

    Thanks Bkev for setting me straight, I'll get it right one of these days LOL
    tml :)
  6. roni

    roni Well-Known Member

    No problem. I've heard the same stuff rumored around all the time. :)
  7. Om

    Om Well-Known Member

    Thanks for the insight.

    This was not a charge off. Rather a car loan that was opened in 10/94 with a few late payments. It shows that it is to remain on my report until 4/03. I just didn't really understand where they got this date. It doesn't really signify anything I can see. It's not the open date, the first late payment, the report date ect.. I guess I was just hoping I could wait a couple of more weeks and have it removed under the 7yr rule because of opening date. Doesn't look that way.

    Thanks again,

  8. doodyhead

    doodyhead Well-Known Member

    Please clarify. I understood that if your chargeoff occurred after 97, they couldn't reage if you made a payment.

    Now, someone mentioned account numbers changing, can they really just change your account number to reset the clock?
  9. jmart

    jmart Well-Known Member

    I also have a charge off....it charged off in 98.. I made some payments until 99.. They updated the "Last Activity Date" each time I made a payment, the last one being in 9/99.. I guess that reaged my account, since Experian says it will be on my account until 9/06, right? Was what they did legal, or should the last activity date be the charge-off date?


  10. Cindy

    Cindy Well-Known Member

    Under the old Fair Credit Reporting Act (FCRA), credit bureaus would start the 7-year cycle over again when the consumer decided to pay off a negative account. This created a catch-22 since it provided little incentive to pay the debt.

    Under the new FCRA, credit bureaus and creditors cannot arbitrarily choose when to start the cycle. In fact, the FCRA requires that the clock begin at the first negative remark that initiated the incident. For example, if you quit paying an account in March and miss all of your subsequent payments through October at which time the creditor sends the account to collections, the credit bureau would be required to begin its seven year period in March when you skipped your first payment.
  11. roni

    roni Well-Known Member

    That's right!
  12. MikeB

    MikeB Banned

    Wrong. They can wait as long as they like to charge off the account, and then they have up to 180 days to begin reporting it (for 7 years). For example, if you stop paying in March, they can wait until December or longer to charge it off. The 7 year period can begin in December or whenever they decide to charge the account off, and they can report it up to 180 days after the last deliquency preceding the chargeoff as stated straight from FCRA as follows:

    "(c) Running of reporting period.

    (1) In general. The 7-year period referred to in paragraphs (4) and (6) ** of subsection (a) shall begin, with respect to any delinquent account that is placed for collection (internally or by referral to a third party, whichever is earlier), charged to profit and loss, or subjected to any similar action, upon the expiration of the 180-day period beginning on the date of the commencement of the delinquency which immediately preceded the collection activity, charge to profit and loss, or similar action.

    (2) Effective date. Paragraph (1) shall apply only to items of information added to the file of a consumer on or after the date that is 455 days after the date of enactment of the Consumer Credit Reporting Reform Act of 1996. "

    I see no where that dictates when the creditor must chargeoff any deliquent account.
  13. Cindy

    Cindy Well-Known Member

  14. Tuit

    Tuit Well-Known Member

    Aren't some, like the banks, required by law to charge-off within 180 days of first delinquency?

    If the creditor first reports to CRA that you missed your payment in May, and all subsequent payments after that, isn't that when the 7-years starts not when the creditor finally decides to charge it off say 2 years later? Isn't the 180 day charge-off period for the purpose of the creditor to try to collect the debt before he decides that it should be written off his books as a bad debt?

    Others have previously posted on this and I thought they were indicating that if a creditor first reports you delinquent to CRA's in May and you never catch up the 7-year rule begins 180 days after they first reported the delinquency and not after charge off, like you said they may never charge it off.

    I hate having so much space between my ears, I hope the lights will come on soon. LOL
    tml :)
  15. roni

    roni Well-Known Member


    At the same time the Statue of Limitations applies to the account and creditors would never wait xxx years to report an account deliquent. The would want to do so as soon as possible even if just internally which as we know happens earlier than with a third party.

    Besides, where is the missing paragraph 6? I don't see it on the FTC website either.....
  16. Tuit

    Tuit Well-Known Member

    Thanks so much Cindy :)
  17. Quixote

    Quixote Well-Known Member

  18. MikeB

    MikeB Banned

    The SOL would probably begin on the day of the chargeoff (depending on state laws), therefore that makes little difference.
    Generally, I think most creditors would chargeoff an account that is past due 180 days or shortly after, but again, not dictated by FCRA. I have seen a local creditor that wrote off an account that was only 90 days deliquent.
    Keep in mind, the creditor gets tax relief for the loss and can then attempt to collect the debt as well. This would be their incentive to chargeoff the account sooner rather than later I would think.

    Paragraph 6 of the FCRA code listed above was removed in the ammended version, so the (6) should be a (5) instead. It has two asteriks that refer you to this at the bottom of the FTC site.
  19. MikeB

    MikeB Banned

    FCRA and the FTC staff letter posted by Quixote do not seem to agree with what Creditnet has posted. Am I interpreting something wrong here?
  20. Tuit

    Tuit Well-Known Member


    they appear to agree to me. It appears that it only applies to delinquent accounts reported to CRA's 455 days after the enactment of the 1996 amendments. So it looks like to me that any negative report to CRA before 12/97 is not subject to the "commencement of the delinquency" provision but any adverse reporting to CRA's after that date are covered under the new amendments and in my mind that means 7-year rule begins from date of first negative report to CRA.

    Hope I am understanding it correctly.

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