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7 Years plus 180 days ??


Fortuna
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I think you're confusing the statute of limitations with the time negative items can stay on your credit report. On credit reports, items can stay on for 7 years (BKs are 10). For SOL, it's date of last activity, which should be date of last payment, but sometimes can only be documented by last activity which is charge off.

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The FCRA was amended last year with FACT (the Fair and Accurate Credit Transactions Act). The amendment was supposed to address the unfair practice of re-aging accounts, which can cause them to appear on a consumers credit past the statute of limitations. It set a clear definition of what the DLA is, or if the DLA is not apparent, a method by which it can be legally established. This method is...

"7-year period...upon the expiration of the 180-day period beginning on the date of the commencement of the delinquency which immediately preceded the collection activity...or similar action".

So, if an account has a history where the DLA is not easily established, then this is the formula to use to identity it legally.

Example: You have a CC now in collection. You made late payments when you were injured in 1999, but paid the card current in 2000. In 09/2001, you got divorced and the card went into collections. Your DLA is going to be the last month in 2001 you paid the account on time before it went into collections. Since industry standard allows accounts to become an R5, I5 or M5 (180 days late) before action is initiated; the statute of limitations is 7 years + 180 days. This collection account can show on your credit report until 03/2008.

Another example: You visit a doctor in connection with that injury in 1999. It gets turned over to a collection agency. Your office visit was on 04/09/1999. The DLA on the collection account is 04/09/2006, regardless of what the collection agency reports. You got service on that specific date and the DLA applies from that date. There is no need for the legal formula, because there is no question when you got service. Thus, the statute of limitations on this account should be 7 years.

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