Reader mail: what to do about many old chargeoffs and collections
.... Both Jobs require background/credit checks and I am afraid our bad history..even though we have good credit with our other bills, will effect their decision. I was thinking of using Lexington until I saw your website. I am just wondering where can I find some “dumb person” instructions on how to go about getting things removed from my report. There is nothing necessarily wrong on there..just the charge offs show as negative..and are all charged off and old..why do they need to be there...and as for the collections accounts..is there anything that can be done about those? I would love to settle..but I cannot even do that as we are barely scraping by..thus the reason for trying to get a new job. I assume I cant remove them since they are “current” and would probably be re-reported again..but I don’t see how these just keep staying current if they are collections and are old...what can I do about those? Pay them then try to have the “pay-offs” removed?
Any advise would help..I looked over your sites but it was just all so overwhelming to me because I am not very good with this sort of thing. Anything you can help me with would be appreciated, and if not, thank you for your time at least in reading this.
Unfortunately, there’s really nothing I can do to help. I have bills to pay, my litigation is getting very time consuming and expensive and I simply can’t work 20 or 30 hours free of charge.
For a couple with these types of reports, it usually takes at least 5 hours EACH for the initial Credit Analysis and in this case I’d have to prepare the actual disputes, add another 2 to 3 hours EACH. Then I have to review the results, and MOST LIKELY it’ll take at least another 3 hours each for the review and 2nd disputes. And THEN the million dollar question is whether all CRAs will finally report ACCURATELY and whether the collectors complied with the FCRA and FDCPA.
When couples have identical accounts on their reports, it actually takes more than twice the time to analyze the accounts. As there are more reports to review, the time required increases exponentially. Of course it depends also on the client how much time it takes. Some people are highly organized, concise, read the reference links I provide and don’t ask many irrelevant questions. Others take 2 or 3 times longer because they won’t provide answers, don’t read anything and expect me to have a crystal ball.
“I looked over your sites but it was just all so overwhelming to me because I am not very good with this sort of thing.”
If it wasn’t for this statement, I would recommend subscribing to CreditFactors. But if you’re not good with “this sort of thing”, you’re wasting your time and money.
I realize that most people don’t have the time and aptitude to gain a thorough understanding of credit reporting. If these OLD charge-offs and collections are reported CORRECTLY and credit was re-established and reported, the scores could well be in the 700s and a prospective employer might not care about the OLD collections.
If the statute of limitations has NOT yet expired, disputes could result in increased collection efforts and creditors/collectors even filing suit.
If you don’t have the money to settle you need to be VERY careful.
Receiving disputes and having derogs deleted obviously tells creditors that your credit is important to you and it’s worth their while to go after you. COLLECTION scores indicate how likely it is that you will make a payment. Mortgage inquiries can result in the notification of creditors/collectors.
I recently got an email from someone who settled with all other creditors and inquired about hiring me to settle with Capital One. She was quite frustrated that Capital One refused to accept her settlement offer and even threatened to sue her unless the account was paid by a certain date.
2 days before the Capital One ultimatum expired, she contacted me.
What are these people THINKING?
Of course she should NOT have settled any of the accounts until ALL creditors agreed to settlements. When I settle accounts for clients, I usually get offers from all creditors and then my client gets to decide whether there is enough cash to settle all accounts and if so or we are close, we’ll decide to accept or to submit counter offers. Sometimes creditors are firm, sometimes they’ll go a little lower, it all depends on the creditors’ current policies, the individual account and the client’s credit report. And of course it depends on whether we have any FCRA or FDCPA violations and whether the client is willing to sue.
I also had another reader email, bitterly complaining about a creditor refusing his settlement offer and he also seemed to think that they HAD to accept his offer.
Apparently more and more people find themselves in a rut after sending moronic letters with absurd demands to creditors and collectors
There’s a lot of HORRIBLE advice at the various credit repair forums on the web. Many of the posted sample letters contain bizarre legal threats and indicate to the collectors that you are a clueless idiot. They have already seen the letter or a variation umpteen times. Most likely none of those consumers successfully sued.
So many people think that THE LEGAL THREATS in their dispute letter got them a deletion and then they go post it at forums and they think they’re so clever. In fact, the collectors are not shaking in fear of a consumer’s lawsuit. They either comply with the FDCPA and FCRA or they don’t. And if they don’t, a moronic letter with legal threats makes you look like a moron to consumer attorneys, judges and juries and it makes it much harder to prevail.
So if you sent these letters and you’re being sued or about to be sued, remember that there is NO law requiring a creditor to accept less than the full balance to settle accounts. And while I’ve worked with people who were being sued, I obviously can’t represent you in court since I’m not an attorney.
It is odd that I rarely get settlement offers for more than 60%, often less and when a creditor wants the full balance, it’s probably your own fault.
If you are obnoxious and unreasonable, you may well end up paying a lot more and/or get sued.
I also had a CreditFactors subscriber post that AmEx faxed a settlement offer for 70% and claimed that was the best any account can get. I know that to be false, as I’ve settled AmEx accounts for about 50%. Do they have special rules for consumers who contact them directly?
I’ve had clients ready to spend $50,000 on settlements and it cost them $250 for my Analysis and they had 700+ scores after the initial disputes because everything was corrected or deleted. They didn’t have to settle anything. Unfortunately, that’s NOT the norm. Anything can happen and you MUST be prepared for the worst case scenario.
So back to today’s email:
“I am just wondering where can I find some “dumb person” instructions on how to go about getting things removed from my report.”
There are no “dumb person” instructions for credit repair, just like there are no “dumb person” instructions on rebuilding your car’s engine or performing brain surgery.
The FTC deliberately misleads consumers with their entirely false statements that there is nothing a professional can do to assist consumers to improve their credit rating.
And now we’re back to the big picture - the conspiracy to ensure that people like this reader continue to have bad credit and LOWER credit scores than they deserve. If these old accounts are CORRECTLY reported, the scores should be ok and prospective employers could see that they are OLD accounts.
The regulators condone the fraud by scummy credit repair companies like Lexington to ensure that people with bad credit continue to have the lowest possible scores due to INCORRECT reporting and deletion of accounts that actually INCREASE the scores despite the derogatory status. See AFTER deletion of the chargeoff: score went DOWN 18 points!
The FTC and other regulators choose to ignore my allegations, posted with the public comments at the FTC website.
“I would love to settle..but I cannot even do that as we are barely scraping by..thus the reason for trying to get a new job. I assume I cant remove them since they are “current” and would probably be re-reported again..but I don’t see how these just keep staying current if they are collections and are old...what can I do about those? Pay them then try to have the “pay-offs” removed?”
This doesn’t make any sense at all.
There’s NO cash to settle, put you have the cash to pay in full?
Of course many collections are deleted after the appropriate disputes, but there’s a good chance that they will sell or reassign the accounts. Often the new collector contacts you PRIOR to reporting on the credit. So if you want to settle, that’s the time to do so.
However, if you do NOT have the cash to settle, you may well end up with a NEW collection, probably lowering your credit scores much more as scores rate collections by the DATE ASSIGNED. While you may be able to the collection off the report again, especially if they can’t document the account and they comply with the FDCPA, you definitely ruin your scores in the meantime and a prospective employer sees the brand new collection account.
Since the credit reporting concepts are difficult to understand for this reader, he definitely should NOT sue for any violations.
Regarding employment and credit:
Obviously employers look for stable people and they don’t want their employees to be hounded by debt collectors and risk embezzlement or theft. Most people get very stressed when subjected to collection efforts, making them undesirable employees, likely to be distracted, absent, ill, etc. Employers don’t want to have to deal with garnishments.
But it all depends on each employer’s policy and you might as well ASK what their credit requirements are BEFORE you apply. HONESTY goes a long way. Since all the collections are old, you may be ok, especially if the SOL expired.
The last thing you want to do is PAY collections reported as such—when reported as tradeline you need to analyze your score factors.
The scores will NOT increase after payment of a collection and you lose your rights under the FDCPA.
Once a collection is paid it becomes very unlikely that it can be deleted, unless you negotiated deletion and you got it in writing.
I really wish there was a “dumb person’s manual” and it has been suggested that I write the “Credit Repair for Dummies” book. Through my extensive experience with clients and CreditFactors subscribers, I know better than to think that it can be done. Too many people end up damaging their credit through their disputes and especially if the SOL hasn’t expired yet, it’s best to do NOTHING.
Of course consumers should NOT have to dispute anything.
The CDIA Manual requires that collectors DELETE accounts that were returned to the original creditor or sold. Yet, few collectors comply and I often see 3 or more collectors reporting the IDENTICAL collection. Many collectors report improperly as tradelines with current delinquent amounts (LVNV).
Unfortunately, very few people care about more than their own immediate problems and that’s why credit reporting is how it is. Many people with credit problems are struggling to get by and have neither the time nor the skill to actively work on changing credit reporting practices and enforcement. And I’m not superwoman and I can’t MAKE regulators enforce the FCRA by myself.
Posted by Christine on 11/28/2006 at 12:36 PM
Credit - Collection - Economic News • (14) Comments • Permalink
What do you do when a judgement has been entered against you, and now a subpeona to provide a deposition of financial records? I have tried to contact the collection company, but have gotten no response.
Christine - I have a number of very old charge offs currently being reported by LVNV, Northland, etc. In many cases, the same account is reported two or even three times. I live in California and the SOL is 4 years. The original charge-offs for these accounts are 5 and even 6 years past, but of course they report them as currently delinquent.
LVNV is now contacting me trying to get me to pay them a settlement for the account, but i’d rather just get it all removed.
I read your disputing piece - in a case with old debts like this that are being re-aged, does that advice still stand? Just send a letter that the account is disputed, please delete?
Many thanks.
Yes, that’s the first step, disputing with the collectors AND the CRAs and waiting to see what happens.
It’s especially appropriate with old collections since they don’t have legal claims anymore as your SOL expired.
Hi Christine I was one that bought the letters produce in a personal way to creditors,Discover is now in court action thru a lawyer in WI and will not give me any information of the account.Is this Lawful? also Sears has sold to LVNV Funding LLc what rights if any are there ofr me? thank you Sandy
please any advise, the company now is suggesting I hired a outside group to pay and advise me I feel like I was sucked in!
Hi,
I am looking for help in improving my credit scores. I have several small collection and charge off items that are bringing my scores down quite a bit and am willing to resolve them. But it is my understanding that just paying them off won’t necessarily help my scores. I would like to find someone that can help me with this that is legit and trustworthy. Any suggestions or tips would be greatly appreciated.
Thanks,
Don
Sandy, there’s no way that I could advise you without knowing a LOT more about your situation and of course I’m not a lawyer. You SHOULD have legal representation, but I realize that you’re probably not wealthy and can’t afford a competent attorney. You can try http://naca.net/ and maybe you can find an attorney to take your case on contingency.
Don, you are correct, paying collections reported as such will NOT increase your FICO scores.
If you’re willing and able to take the time to READ and LEARN, I highly recommend subscribing to http://creditfactors.com/
American express sent my account to collections for $1700 owed from June 2006. if I pay american express and not the collection agency ( if possible) Would american express consider deleting this negative report.
Home depot I paid the creditor a year ago it still shows on my report??
I have some old collection accounts and chargeoffs. What is the time frame on having these deleted or “gone-away”? Can they sue me past the time frame? Or once the time frame is here, they can;t do anything? Please help!
We bought a RV back when our business was doing quite well not ever expecting the bottom to fall out of the business. As a result we voluntarily surrendered our RV after digging deep into our savings which was for our retirement in a cuople of years. With our saving almost depleted we consulted a debt counselor, free of charge. We were told to get rid of our RV. Gas was surging and we could not sell. we tried to keep paying it but money ran out. We did not want our credit to take that sort of hit, is why we kept paying. Now it is on our credit as a charge off, because they sold it for far less than its value. Leaving us a whopping $35,000 still in debt. After the threat of a lawsuit to get us to pay we agreed to pay $50.00 a month which means we will be dead at this rate. Our credit report say it is due to be removed 2011. With hardly no income we can barely pay the 50. If we stopped paying or pay less will it change the 2011 date?
It won’t, according to the FCRA. However, of course they could re-age the account and you’d have to fight to get it corrected.
SAVE your credit reports!
I apparently missed Angie’s question:
“I have some old collection accounts and chargeoffs. What is the time frame on having these deleted or “gone-away”? Can they sue me past the time frame? Or once the time frame is here, they can;t do anything? Please help!”
I have NO answer regarding the statute of limitations, STATE law determines how long you can be sued, it has nothing to do with credit reporting:
7 years from the first permanent delinquency + possibly 6 months.
I have been doing credit repair as a legit business for over a year now. I truly want to help people and help them to raise their credit score. My wife and I are doing this because of our ministry. Don’t get me wrong this credit service is not part of the ministry. But we want to help people as this was par t of the ministry. I have put in a lot of man hours on reports. Just for people to go make their on deals with collection agency while I am fighting them, go finance more items while in the program. To getting me collection letters two months after they receive them. I made sure I was doing business they right way. I am one of the only State Bonded & Registered Credit Service Organizations in Texas. I recently help a customer to defeat Midland Funding LLC in court. With the Paperwork we provided the lawyers didn’t even show up to court. That was two court appearances, tons of letters and studying on my part for $160.00. Believe me I am getting wiser when it comes to charging customers But for someone reason in my heart I can’t bring myself to charge anyone over a $1,000.00. I say all that to say if they do need help I am glad too. They can check me out with the Secretary of State office in Texas, BBB or anyone else. They will find no compliants and every thing is legit. Thanks for your time and effort you are putting in to the cause. God Bless
Dyral, you might want to consider publicizing your research and experiences as I do, at the very least start a blog and DOCUMENT the problems.
I’m sure you’ve seen http://creditlegislation.org/ and it really would be too cool if I wasn’t the ONLY credit professional who exposes systemic problems, FICO scoring bugs, etc.
“I can’t bring myself to charge anyone over a $1,000.00.”
Well, it’s not my or your fault that the CRAs and creditors/collectors refuse to comply with the law.
Of course I’m so frustrated, I just doubled my rates because I just don’t feel like WORKING myself into bankruptcy.
It’s good to see that the CreditFactors subscribers who put in the hours to read the materials and who post their questions are getting at least SOME results. But for the most part, it’s just such a struggle ...
Experian should be sued for their phony and deceptive advertising re: “FREE CREDIT REPORT”.They advertise on the local T.V. stations’ website and try to add credability to their “damnable lies!!
They HAVE been sued. Unfortunately, the class actions didn’t change anything but make the lawyers richer.
