I received a letter yesterday from a collection agency stating that when I lived in Pittsburgh 9.5 years ago that my phone was disconnected and that I owed Verizon $137. I have since moved to Michigan, never received any word from Verizon about this account and have been using Verizon wireless for over 6 years.
I don’t have any paperwork from 9.5 years ago, having changed banks a couple of times and not bothered keeping phone records that old for an account that I was sure was closed properly. I am going to write them a letter 27 days from now stating that I don’t owe them any money and for them to prove that I do. My question is, can they actually do anything to my credit if I refuse to pay? Even if they can would it stay on there very long since it is so old? Could they attempt to garnish my wages if they find out where I work?
Most likely I’ll just offer them $50 to go away since they probably purchased the debt for 5 cents on the dollar anyway. I’d just like to know if I could just blow these guys off or not.
Nope. Don’t offer them ANY amount of money. 9.5 years is enough time that they are not legally allowed to get any money from you or put it on your credit history.
Have you checked your credit record lately? You can get a free copy from freecreditreport.com. If it’s not on there now they can’t add it.
However, if you do give them even $50 they can consider the debt active again, continue bugging you about it, AND put it on your credit record.
Dont go to freecreditreport.com. It’s a BS scam. “Free credit report requires enrollment in Triple Advantage” or someshit. Why go through the hassle of just getting it and waiting to get the info so you can cancel it in a month.
Go to annualcreditreport.com
It’s the non-bullshit credit checking site that doesn’t try to trick you into enrolling in something. It will even send you an email in a year when you are eligible for another free credit check.
Don’t use that site. It is run by Experian and they will try to confusingly upsell you on all their non-free services.
The one overseen by the FTC is annualcreditreport.com which will supply you with your free report from all three agencies as required by the Fair Accurate Credit Transactions Act of 2003. The site itself is run as a joint service by the three major bureaus and they are not allowed to try to sell you stuff through it.
Paying a debt does not ‘reactivate’ an account and reset the ‘7 year law’ as it refers to reporting a deliquency on a credit report. If the original debt started to go sour 9 years ago, it would have been dropped from any credit report 2 years ago.
Also, don’t confuse an obligation to pay with the credit reporting requirement. If something can’t appear on your credit report (or say it was deleted due to a failure to verify via a dispute) it does not excuse the payment.
Unless I’m reading that incorrectly (which I may be), I don’t think that’s true.
I have a friend that works in debt collection and one of their tricks for accounts getting near the 7 year limit was to call and say something like "Well how about you just send me $1, just send me one dollar and I’ll stop pestering you. When she get’s the dollar, it counts as activity on the account and she’s got seven more years. This was something she did regularly. Maybe it was illegal though, some of the things she told me about, I’m pretty sure are illegal, but I don’t know that SHE knew that.
As per the Fair Credit Reporting Act, the original date of deliquency which starts the 7-year clock ticking is the first delinquency that leads to a continuous string leading the charge off/collection. That date would result in the dropping of the account from a report.
If there was a stand alone delinqucy prior to the string that led to charge off or collection, that would be dropped, but the account would remain (if the account remained in good standing — non-charge off., non collection, non- repo, etc)
So, paying a bad debt resets nothing. If the collection agency illegally changes the orig date of deliquency, then that is underhanded/illegal/ etc.
May I add a question to this that arose - well - today?
My mom called, stated I received a demand for payment from a collection agency. I used to have a credit card from a now defunct store and was stupid low those many years ago. Anyways, said collection agency bought my outstanding debt. My mom, being the person she is, opened it and decided to pay it off for me.
She remitted a check today for 1/3 the original balance. The letter had three options - paying the 1/3 will settle the entire debt. Note that this is NOT on my credit report. Without telling me until she mailed it.
If the item was on your report, it would show as a collection/charge off. The payment she made would update the account to a better status of ‘settled’, which means the account was settled in full for less than the full balance, which is an improvement over ‘charge off’ or ‘collection’.
But since the account is not there, there is nothing to be reported.
Philster is mostly right: Paying a debt is* not suposed to *‘reactivate’ an account and reset the ‘7 year law’ , but it sometimes does anyway and takes months to fix.
If the original debt started to go sour 9 years ago, it *should *have been dropped from any credit report 2 years ago, *but many credit reports are full of errors and outdated debts are one of the more common errors.
*
We have the large gap between what the law sez and what actually happens. They can- and will- re-report debts even 10 years old, especially if there is new activity. You should “dispute” said errors and you will eventually prevail, but it could takes months- months where you might have a big fat “derog” on your Credit Report, which could cost you thousands of dollars on a re-fi, or even get your refused for example. And, you have very little recourse, even though it is techincally illegal.
Note that although the Lender certainly can ignore obviously wrong derogs on your credit report- but very rarely will. No matter how obvious the error they often treat a credit report as Tablets from the Mount.
So, do not screw with very old debts. Let the dead dogs lie.
An interesting point or two (at least to me): When I worked at a credit bureau (clerical help), they never pulled that “Just give me $1” stunt. It was illegal in California–and probably everywhere else, for that matter. Also, they never bought debts. What happened was that a client would purchase debts and then refer those debts to the credit bureau. The place where I worked was a family firm (not my family, though) and the owners were quite adamant about everyone there following the laws that related to credit reporting and debt collection.
We’d need more details. If the amount was showing on your current credit report, then yes. The debt may now show up as a charge-off* . The best recommendation would be to work with the collection agency and pay the balance contingent on them changing the credit report from charge-off/delinquent to “Paid as agreed”. This will also up your score.
*But the “clock” won’t be re-set. If the debt is past the statute of limitations in Minnesota, (7 years) it won’t show up on your credit report either.
You can request free mailed copies of your credit report from both. If you want the report on-line or you want your score as well, it will cost you.
Note that you do need to enclose identification in both cases (see the links for details), but photocopies seem to suffice - I recently got reports from both places.