There are always a lot of misconceptions about debts charged off prior to 1996 and is probably one of the most common questions I get. You have to remember, the old FCRA was very ambiguous which means, even though it was not specific for saying exactly when a date commenced, it has never been legal nor acceptable to charge a debt off and then report it for another additional 7 years simply because a payment was made. What did happen however is that the creditors and CRA were doing that to some people because like many others, they really did not understand the ambiguity of the FCRA. However, as soon as a consumer brought it to their attention that they were reporting the debt past the 7-year rule, then they (Creditor or CRA) should have complied. Repaying a debt cannot restart the clock on reporting whether it was charged off prior to 1996 or after. Even the original FCRA did not allow for that. The last activity at that time, meant date charged off, last paid, or closed but did not and never has allowed a creditor to use the DOLA as a new "Commencement of Delinquency" It has happened to many people but can be argued very effectively as even pointed out by the attorney at the FTC who says "If an account was reported as a charge off before the date (1997), the Commission's view has been that it can be reported for seven years from the date the creditor actually charged it off." That is very specific and legally you can always fight this if it happens to you. One letter to a CRA or creditor with a copy of the FTC opinion and Bam! Removed. Be sure to read the very last line of this posting. It tells you exactly what the FTC believes happens to debts charged off prior to 1996. Here is the Q&A from FTC: Question: Is the reporting period extended if (A) the original creditor sells or transfers the account to another creditor, (B) the consumer responds to post-charge off 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 chargeoffs -- 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 chargeoffs. Question: Since Sections 623(a)(5) and 605(c)(1) provide new rules for calculating the 7-year period that became effective in 1997, do charge off accounts now have different obsolescence periods depending on when the charge off 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 charge off 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 charge off reported to a CRA before December 29, 1997, is not covered by the new provisions. But if a credit account was reported as a charge off 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. So, in closing, my point is, yes it happens but is it legal? No. Can it be faught & removed if it does happen? Yes. Do creditors really go by the before & after dates anyway? NO! Most of them don't even understand it and merely follow the current revised FCRA, afterall most would have to be an attorney to even figure this crap out huh? Hope this helps! Kristi ps: I am not a lawyer & this is just my OP!
RE: The 7 year rule- Please pr What about Bankruptcies? What date is used as the last activity? The actual 1st date of delinquency or charge off BEFORE the bankruptcy? or is the bankruptcy date considered the DATE OF LAST activity?
RE: The 7 year rule- Please pr The debts themselves are still listed from charge off date to 7 years. The BK will be a seperate listing for which it will remain for 7-10 years from date filed. The 7-10 year rule depends on the chapter filed. fantoinett wrote: ------------------------------- What about Bankruptcies? What date is used as the last activity? The actual 1st date of delinquency or charge off BEFORE the bankruptcy? or is the bankruptcy date considered the DATE OF LAST activity?
