Dealing With Creditors: Debt Re-Aging
Published Saturday, January 9, 2010 @ 8:45 am
By now most consumers know that one of the first things to take a hit when debt problems come knocking is the good ol’ credit score. Sometimes people end up with a bad debt hanging like an albatross around their necks–and dragging down their credit scores–for years. But there is light at the end of the tunnel: negative information can only legally remain on your credit report for so long before it gets wiped away. After 7 years, you can expect a bad debt to be scrubbed from your report; but can you rely on the credit reporting system to ensure you’re not getting a raw deal?
You should check your credit report periodically and ensure that the information being reported about you is accurate. You definitely want to make sure that negative information is being reported fairly; as many debtors have found, negative information not belonging to you can end up on your credit report as a result of mistake or fraud. Even if you are responsible for a bad debt listed in your report, mistake or fraud may have caused some details of that debt to be misreported. Debt “re-aging” refers to a bad debt whose date of expiration, so to speak, has been artificially extended; if you find this kind of mistake on your report, there are steps you can take to fix your report.
Keep in mind that there are three credit bureaus which report credit history. If you believe a debt has been re-aged, you will have to contact all three bureaus to request the removal of the debt from your file. Thus, you want to obtain a report that contains information for all three bureaus. Look at the date of last activity reported on your credit report for the bad debt. The clock starts at 180 days after the date the debt first became delinquent. If the original debtor has sold the debt to a debt collector, the debt collector may fraudulently move the date forward in an effort to coerce the debtor into paying, either by prolonging the bad effects of the bad debt on the debtors credit history or even just to bring the debtors attention to the debt once more. However, keep in mind that mistakes happen; sometimes a creditor may simply have received incorrect information about the debt from the original creditor.
When the original creditor no longer appears on the debt, the debt is past the 7 year deadline for reporting. Any debt that you know to be older than 7 years should be contested. If you find a re-aged debt, contact each credit bureau and request the removal of the incorrect information. You may be able to contest the debt online, on each credit bureau’s website, but you may have to complete a dispute form and mail it in. Include documentation about the debt, for example, information that proves that the reported creditor is not the original creditor, and documentation of the date of delinquency, such as credit card statements. You may also want to include older credit reports that accurately reported the age of the debt. Keep a copy of each letter you send to the credit bureaus.
The credit bureaus have 30 days to remove incorrect information from your file. If the information is not removed, you may want to file a complaint with the office of your State Attorney General. You may also write to the Federal Trade Commission to complain about the creditor, or even attempt a lawsuit against the debt collector. It can be difficult to prove that re-aging was purposeful, but the right kind of pressure can cause a debt collector to respond to your request. Remember that your goal is to get the unfair negative information removed from your credit report, so you can also try to appeal to the bureaus to remove the debt from your report on other grounds.
On the other hand, if waiting for debt to fall off your credit report is not an option, and if what you really need is to get out of debt now, and to get a “fresh start”, consider filing bankruptcy. And if you do, keep the Law Offices of John T. Orcutt in mind, a North Carolina bankruptcy law firm offering a totally FREE initial consultation out of 4 different offices: Raleigh, Durham, Fayetteville and Wilson. Just call toll free to 1-800-899-1414 or visit their website at www.billsbills.com .
Post-Bankruptcy Credit Report Errors
Published Thursday, July 9, 2009 @ 2:48 pm
Coming out of bankruptcy is a great milestone. It renews confidence, offers comfort and provides you with a sense of accomplishment from meeting a tough challenge head on and surmounting it.
Like most people who have experienced these emotions, you have comprehensive understanding of how to better control your spending and look out for your financial well-being. One component of that is learning to identify common credit report problems that arise after bankruptcy.
Look for a record of credit agency activity that is listed separately from the debt they tried to collect. This makes it appear as if you had two outstanding debts. The original debt should have been discharged as a result of your bankruptcy and thus, the agency should not appear on the report. This is a very frustrating component of a post-bankruptcy credit report because a bankruptcy eliminates debts with organizations to which you owe money but does not eradicate the record of the debts. In other words, it’s a two-step process: removing the debts and reporting that they were removed. Parts of the second step often fall through the cracks.
Another common reporting error involves accounts that were reported closed by the creditor instead of it being closed by you. This would indicate that a creditor shut down the account instead of it being done as a result of a bankruptcy, intimating that it was done outside of your control because of your inability to pay. If a closed account appears open and the payment history demonstrates a clean record, leave that one alone because it will help.
We’ve said on the blog many times but it bears repeating: make sure your credit report looks good at all reporting agencies. It’s very possible that one bureau reports a solid history and the other still shows bad debts. It is also crucial to ensure any existing debt is correctly reported by all agencies.
One technique for proving credit report accuracy after a bankruptcy is to compare your report with your bankruptcy paperwork. Look at discharged debts and then what is listed on your credit report. This is bare-bones way to rest comfortably that your information is being handled the right way and won’t derail any future loan plans, such as a mortgage or student loan.
One last bit of advice: Do not turn to a credit repair business to repair mistakes in your credit report. These are businesses that charge a hefty up front fee, promising to improve your credit score quickly. As someone who took the initiative to contact an attorney, gather your wits and decide that bankruptcy was the best option, you can repair your credit on your own. With some time and a little bit of effort, you can rebuild your credit.
From: The Law Offices of John T. Orcutt. Helping thousands of families with the power of bankruptcy. Call 1-800-899-1414 to set up a free initial debt consultation.
Common credit report errors and how to handle them
Published Monday, May 18, 2009 @ 4:30 pm
We see the commercials, hear the clever tag lines and are inundated with information about how to receive our credit report. So while a goofy guy singing catchy tunes about the perils of not knowing what’s on your credit report certainly has its marketing merits, his chorus doesn’t say much about what to do when you find something on your report that doesn’t ring true.
First, make sure that your report is indeed your report, as many of the mistakes found involve the most basic information, such as your name, social security number or birth date.
Look for items that are older than seven years, which signifies that a report item must be removed. Watch for accounts that are reported more than once or any indication that you were part of a lawsuit. Some potential creditors may believe that to be a sign that you owe part of a settlement and therefore may not be a worthy credit risk.
There is a reason why your credit report will arrive with a dispute or investigation request form: you have to take care of reporting any errors. Credit reporting agencies are not at all proactive about investigating mistakes not brought to their attention; it’s simply too tall a task. Therefore, your first step in taking care of any error is to complete and submit the form. It helps a great deal to include a personal letter identifying the particular issues in more detail.
Next, contact each of the organizations involved with an error notifying them of the mistake and asking for an official receipt that includes the account number in question, their reasoning for the dispute and all accompanying information related to the account. Be firm but professional in your letter and demonstrate that you will continue to follow up and pursue the matter indefinitely until it is solved.
Should your efforts return positive results and your report is corrected, don’t just sit back and assume the best. It is not at all uncommon for deleted information to re-appear. Remember that somewhere amidst all the computer-generated data and automated financial reporting, there is a person in front of a computer. Order another report a few months after you believe the errors should have been corrected and if you do spot the same mistake, send yet another letter with the evidence you gathered the first time around, demonstrating their recognition of the error.
Remember that if a creditor believes their dispute is valid, the information will stay on your report. Continue your efforts of paper-based contact with the creditor to create a provable record of your persistence. Should the creditor come around and finally confirm the fault is theirs, you should forward that confirmation to the credit bureaus as soon as possible to ensure the mistake is removed.
Credit report errors can do some real damage if not taken care of quickly. Paperwork, forms and phone calls are all part of it, so be patient but persistent and always remember that it’s your good name on that report. And remember, if you are in over your head in debt, bankruptcy is often the most efficient solution to rebuilding your credit. Talk with a bankruptcy attorney to find out how to take control of the debt collectors now. Serving North Carolina residents, contact the Law Offices of John T. Orcutt today for a free bankruptcy consultation.