Maintaining good credit can be challenging, particularly after a life-altering event like job loss. Even if a creditor charges off one of your accounts as bad debt, that doesn’t mean you’re safe. You might still have to account for the bad debt in collections – even after the record drops from your credit history. Post resource – Beware phantom debt pains from charge-offs by MoneyBlogNewz.
Only seven years of charge off
You will find many credit rating charge-off scenarios. Consider this one. Bankrate states that there are different rules for collecting financial debt and reporting debt which means it might be off your credit rating but might nevertheless belong to you. The Fair Debt Collection Practices Act (FDCPA) provides the guidelines for financial debt collection, while the Fair Credit Reporting Act (FCRA) holds jurisdiction over how a charge-off is reported.
On the plus side, the FCRA mandates that a charge-off must be removed from your credit score after 7 years. That includes whatever financial debt collection agency owned the financial debt. You are able to look at your credit report pretty easily. Just do it a month after the charge-off was intended to occur. The bad debt should be gone. If it is not, Equifax, Experian and TransUnion are the places you are able to dispute it.
Student loans, tax liens and Chapter 7 bankruptcies can’t be charged off.
Charge-offs: The dark side
FCRA rules help individuals out a bit. It keeps bad credit from staying on a credit history forever. The FDCPA doesn't have the exact same rules though. Financial debt collectors can still bother you for money. A market is there to purchase bad debt though. Consumers needing debt repair are concerned about this. At least once, an agency will make an effort to collect from you. A charge-off will not happen until then.
Can a consumer escape from that bad credit card debt amassed during a span of joblessness? The statue of limitations is there for a reason though. This means consumers can get away from this credit card problem. The state and court system will determine how long this time period is although it is generally 6 to 10 years for installment loans, auto loans and payday loans and 4 to 6 years for charge cards. Your state's attorney general can be accessed. This is where you should go for more information.
Debt collection law
Legally, a debt that has passed the statue of limitations cannot be pursued anymore. That means nobody can come asking for your money. You can do a counter-suit if a debt collector continues.
Counter suits aren't cheap though. You’ve to have time, a lawyer and money to pay for it all. The best way to get out from under a financial debt collector that is pursuing your debt in a legal fashion is to either pay what you owe in full or come to a settlement.
Information from
Bank Rate
bankrate.com/finance/debt/debt-dropped-from-credit-report-still-owed.aspx
Equifax
ai.equifax.com/CreditInvestigation/
Experian
experian.com/consumer/cac/InvalidateSession.do?code=DISPUTE
Trans Union
annualcreditreport.transunion.com/entry/disputeonline
How to deal with collections
youtube.com/watch?v=9SVFdH0Ayco
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