how long can collections go on?

[monlyba]

I'm not sure if this is the right area for this, and I have a feeling it's a question that has probably been asked before, but I wasn't sure what words to even use to search for the answer.

Basically what I'm trying to figure out is the "rule" so to speak on how long credit issues/accounts will stay on your credit report. It seems most people I talk to also don't know the answer but think they do... everyone says oh yeah, stuff goes away after 7 years. But, when I ask for more details, no one is sure... is that 7 years from when the account went delinquent, 7 years from when the last payment was made, 7 years from the last time they made contact with the debtor, 7 years from when? and also, if an account is sold to another company/agency, does that affect the time at all? and once things "fall off" the report...what does that mean, exactly? do they just disappear from the report? do you have to do something to make them come off?
thanks for your help, I'd love to finally have a clear understanding of this!

[treehugger1]

I don't have an exact answer, but keep in mind that there is more to your credit score than accounts and collections. If a judgment is rendered against you, this can stay for a few years to - forever depending upon the state. Many states have judgments that are renewable every few years.

I don't know how scores are affected as an account gets charged off, sold to a CA, sold to another CA, etc. I would assume that each collection account on the same original creditor account can dramatically affect your credit rating much longer than 7 years. But, I'm no expert. You might try googling "creditnet forums or boards" and see if there are sites out there with experts who might answer your question.

[monlyba]

thanks... I don't know if I've been insanely lucky or what, but I had about... oh, I think 7 or 8 credit cards (with low limits, probably a total debt of $8-15k for all of them) and after college and too many crappy jobs for a couple years, had to stop paying the minimum payments on them and let my credit go to pot... and the last time any of them got a dime from me (or even any contact, as far as I can recall) was in 2002. sure I got plenty of phone calls for a while, but after several phone # changes (not due to that, mostly just moving around and stuff), and the fact that I pretty much never ever answer a phone call from someone I don't know personally, they left me alone at least verbally after a few months, and I just got lots of letters... soon they weren't from the original banks but from collection agencies... then the agencies began to change several times a year, each account appears to have been sold and re-sold tons of times since then. some of them apparently haven't even been able to keep up with me, I've moved probably 6+ times since '02 and don't even get letters from all of them anymore. my credit report is super-long since so many of them are showing up on there along with several of the agencies that have held the debts at one point or another, it's kinda confusing for me to even figure out who's who and who's collecting for which original creditor, etc (and I'm sure not calling them to ask - lol). but, nothing has ever turned into judgments or me being sued or garnishments or anything serious like that. I just get the collection letters reminding me of the debt, sometimes with offers to settle (still never low enough to make it worth my while) and maybe a few sporadic phone calls, all of which go unacknowledged by me (well, I save the letters in a file but never ever speak to anyone on the phone).

anyway, so I have just been thinking lately that the mysterious 7 year timeframe for many of those might be coming up soon. I still have plenty of other reasons to file CH 7 even if I knew for a fact that all those credit cards accounts (and their subsequent collection accounts) would fall off my report next year sometime, but I'm mostly just wondering how that all works since no one I've ever asked seems to know... everyone just knows that there's something about 7 years in there somewhere! I almost wonder if I could let them fall away and deal with my other more recent debts in another way (consolidation or credit counseling or something like that) and avoid the BK... not sure. but it's worth looking into if those others would all disappear in '09 and cut my overall debt down somewhat.

[treehugger1]

605 (3) is a potential problem as far as what I've heard. Example: Your original creditor charges off your account after 180 days. They keep collections inhouse for another 18 months. Then they sell this to a CA. Two years have passed, and now the collection activity first appears on your credit report. This potentially starts a new 7 year clock for reporting. This has nothing to do with the SOL of collecting on debt after whatever years are allowed by various state laws. The SOL may run out, but I'm not sure that the derrogatory report to your credit report will take another 2 years to drop off. So, in effect, I would guess that the unpaid debt could show up for 9 years. Others can add their opinions here.

[monlyba]

I'm a bit confused... trying to follow, though!
I have heard the CAs are slimy (no sh!t, right?) and will try to make it like the clock starts over when they get the debts... which is why I was wondering since all of my old cc debts seem to switch CAs every few months, and they always have new balance amounts when they get the acct, guess they add in their own fees and interest? not sure how legal that is. I am not even sure what my original debt amts would be or how to find out. I can look at info from 5 CAs all referencing the same original cc and see that $ amt go up and down (mostly up, of course) over the past few years, it's a mess.
so should I sent DV letters to basically all the CAs on my report (the ones referencing old cc debts, that is) or are you saying it's not wise to do that unless the SOL is definitely passed? cause I'm not sure what time of year in '02 I last paid on any of them, but I'm thinking summer or fall... so I guess the 7 yrs won't be up until that time in '09?
ughh... not sure it's even worth stressing about, I have plenty of other more recent debt that makes it worth my while to file Ch7, I should just do it and not worry about this part... but I really want to understand it. guess it's not as clear-cut as I'd hoped! thanks so much for your help.

[treehugger1]

I agree. The workload is on the debtor. It is the debtor's responsibility to "clean up" any travesties and dispute them. Very unfortunate that the debotr must apply the law and ask for evidence, while the CA/creditor only has to wait for a potential dispute. And, while there might be "offenses" that can be sued over, the payoff is probably not worth the fight. Just my opinion.

[keepmine]

It's 7.5 years from the date the debt went ino default. The language in these 3 staff opinion letters sats, 'Congress intended for a date certain,etc."

http://www.ftc.gov/os/statutes/fcra/johnson.shtm

Thus, Congress intended to establish a date certain -- the start of the delinquency -- to begin the obsolescence period (now seven years, plus 180 days).(2) The alternate view stated to you (that the date of reporting controls) is at variance with both the plain language of these amendments, and the intent of Congress in enacting them.

In sum, we believe that the phrase "commencement of the delinquency that led to the action" in Sections 605(c)(1) and 623(a)(5) of the FCRA should be construed according to its normal meaning. If a consumer falls behind on an account and never catches up, the delinquency has its "commencement" when the first payment is missed. From that point on, the account is past due and thus delinquent.

http://www.ftc.gov/os/statutes/fcra/kosmerl.shtm

http://www.ftc.gov/os/statutes/fcra/amason.shtm

And, the FTC seems to back up these opinionletters with there enforcement action.

http://www.ftc.gov/opa/2004/05/ncogroup.shtm

[treehugger1]

Now I see why some CC companies wait until the very last possible moment to charge off an account.