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Collections due to co-signer not paying


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This incident happened in Nov 2003.

I co-signed (CR states Responsibility: Shared) on a apartment lease (3 month) for a friend. (SSN of mine and his were on the lease). He did pay his rent on time, but seems he skipped town overnight, literally he fled the country. Time went on, nothing happend. I assumed he paid all his rent as I never got a call from the apartment complex demanding rent from me, which I should have as I was co-signer on the lease.

Now a company called CollectionsUSA, a CA ( on behalf of the Apartment complex ) is wanting to collect $507 from me. (CR Condition:Derogatory) I did call the manager of the apartment complex, but unfortunately the apartment complex is bought over by another real estate firm and under new managment.

How do I go about this CA? How do i get it off my CR?( I have also just been a victime of ID theft, had PD docs stating that)

thanks in advance

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Unfortunately, you might be the one who has to pay this bill. Co-signing creates a lot of headaches down the road. If they are unable to locate your friend, they have the right to come to you. It is always better to work with the original creditor on this, however, since the company has been sold, the new company probably doesn't have information on your case. If you have to work with the collection agency, I would suggest trying to arrange payments with them with the contingency that the collection be removed once final payment is made. Make sure you have this in writing before proceeding otherwise they can get your money and it still sits on your credit report. Also, when you make payments on the account, the "date of last activity" changes whereby extending your account to be on your credit report longer. It's seven years. Each time you make a payment, they move that date further. That's why it's vital that you get an agreement in writing regarding the payment arrangements as well as the removal from your report. Hope this helps!:)++

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"...I never got a call from the apartment complex...which I should have..."

Creditors, even apartment complexes, do not contact co-signers. They simply procede with derogatory action, like reporting it on your CR.

"...when you make payments...the "date of last activity" changes whereby extending your account...on your credit report longer..."

This is incorrect. A derogatory listing may appear on your CR for 7 years from the Date of First Delinquency (immediately prior to default) NOT the Date of Last Activity (such as a payment). NOTHING legally extends this Reporting Time Period. If the RTP is extended, that is a violation of the FCRA. You can find this information by hitting the FCRA sticky at the top. That specific data is located at 1681c Section 605(a)(4) and ©(1).

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This incident happened in Nov 2003.

Q: Is that when he first quit paying his rent?

I co-signed (CR states Responsibility: Shared) on a apartment lease (3 month) for a friend. (SSN of mine and his were on the lease).

Q: Was this a month-to-month lease? What type of rental agreement? How long did he/she live there?

Now a company called CollectionsUSA, a CA ( on behalf of the Apartment complex ) is wanting to collect $507 from me. (CR Condition:Derogatory)

Q: Have you requested that they validate this debt?

How do I go about this CA? How do i get it off my CR?( I have also just been a victime of ID theft, had PD docs stating that)

Contact them via letter. Send it CMRRR and request validation in light of your ID theft. Send them proof of your ID theft.

Q: How long did your "friend" live in the apartment? If the lease was up by the time he vacated, you would've had to have signed a new lease. But I need to know the type of lease you signed.

Q: What state do you reside in?

Once you answer those questions I'll know what else to add. I'm really sorry you're going through this. You tried to help a friend and it backfired, that's too bad. Do you think this friend had anything to do with your ID theft?

Elyse

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Q: Is that when he first quit paying his rent?

The CA on behalf of the apartment complex wants to collect $507 from me (this is the amount on the CR), so it seems he missed one months rent. I have NOT contacted the apartment complex and the CA up to this point for any details.

Q: Was this a month-to-month lease? What type of rental agreement? How long did he/she live there?

This was a 3-month lease. I do not know what type was it. How many types are there?

Seems to me he lived there for 5 months and skipped the last month.

Q: Have you requested that they validate this debt?

This question I need help some more help. The PD docs have all my details, SSN, phones etc. I am too scared to send them over to anybody, especially a CA. This way the CA will have all my details. What should I do?

Q: What state do you reside in?

I reside in Arizona, Maricopa County.

Do you think this friend had anything to do with your ID theft?

Doesn’t seem like he had any role to play in my ID theft, seems he had creditors chasing him for much more so he skipped the country. Regarding the ID theft I have just received the PD docs, but not moved forward with filling anything with anyone? I’m reading more about it in the ID theft section of this website. Anything I should do ASAP?

Thanks guys, I have lost my sleep over this, but your support makes me look into tomorrow.

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"...I never got a call from the apartment complex...which I should have..."

Creditors, even apartment complexes, do not contact co-signers. They simply procede with derogatory action, like reporting it on your CR.

"...when you make payments...the "date of last activity" changes whereby extending your account...on your credit report longer..."

This is incorrect. A derogatory listing may appear on your CR for 7 years from the Date of First Delinquency (immediately prior to default) NOT the Date of Last Activity (such as a payment). NOTHING legally extends this Reporting Time Period.

I'm not sure that's not true and I think this is what so many people on this site confuse.

If you make payments so that you are no longer delinquent, then DOFD does not change. If you fall delinquent again, then I'd think DOFD would start all over... I'd think. So, then they could legally report the negative 7 years from the new "first delinquency" date.

Another thing people confuse or overlook... making payments will, as you said, advance the latest activity date. It is believed by some (or all?) that this may actually hurt your score, as the 4-yr old collection all of sudden becomes a 1-mo old collection. I don't know if this is true, as I haven't paid attention to my scores when I have fully paid a collection.

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"...this is what so many people...confuse..."

It's true that if an account is late, caught up, late again, that the DOFD changes and the RTP is extended. But once an account goes into DEFAULT, the DOFD is set. The FCRA uses terminology like "placed for collection, charged to profit and loss or similar action".

Prior to the FACTA amendment, re-aging like this was commonplace. It's one of the major reasons behind the amendment (along with provisions for victims of ID Theft). Now, things are very different. If you can pinpoint and prove your last on-time payment immediately before default, you should hold creditors and CA's to that date. They can report for 7 years, only.

FCRA Title 15 USC 1681c Section 605(a)(4) "...Accounts placed for collection or charged to profit and loss which antedate the report by more than seven years"

And Section 605©(1) "...The 7-year period...shall begin...upon the expiration of the 180-day period {industry norm time-period for charge off activity} BEGINNING ON THE DATE OF THE COMMENCEMENT OF THE DELINQUENCY WHICH IMMEDIATELY PRECEDED THE...ACTIVITY..."

So, regardless of whether you made payments or not, AT DEFAULT, the DOFD is set for RTP. Nothing legally changes that date. There is also the need to understand "activity", DOLA and DOFD. Paying after default is definitely activity and can, in some states, re-set SOL. That still has no impact on RTP as established by the (federal) FCRA.

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You are probably liable for this as a co-signor. Apartment leases almost always have a clause that sets the lease agreement into month-to-month mode once the contracted period has expired. A 30 day notice to vacate made in-writing is usually required to escape any further liability.

Since your "friend" (I use that very loosely since he seemed willing to leave you holding the bag for his responsibilties...not much of a friend in my book) skipped country he probably did not put in a written notice of intent to vacate. BUT...There are limits on what the landlord can charge.

If they re-rented the apartment quickly, they can only charge rent for the time between where they filled the apartment and when he left. So, if they re-rented it 15 days later, you would be responsible only for those 15 days, not the whole month. The landlord does not get to double-dip on the rent.

Do send the CA a validation notice. And do it quickly. Landlords are required under nearly every state's laws to provide a detailed list of all expenses with copies of receipts if they are demanding money or keeping any portion of a security deposit after a unit has been vacated. So if they want $500 they need to explain what happened to the security deposit, line by line, and why there is still a balance due.

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"...this is what so many people...confuse..."

It's true that if an account is late, caught up, late again, that the DOFD changes and the RTP is extended.

I don't think it does IF the account remains open and, eventually current. Obviously, if it's charged off, that's a different story and the DOFD does change.

I think it's recalculated when the older lates fall off.

ETA: everything after the IF.

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The law reads:

The 7-year period referred to in paragraphs (4) and (6)(2) of subsection (a) shall begin, with respect to any delinquent account that is placed for collection (internally or by referral to a third party, whichever is earlier), charged to profit and loss, or subjected to any similar action, upon the expiration of the 180-day period beginning on the date of the commencement of the delinquency which immediately preceded the collection activity, charge to profit and loss, or similar action.

So if an account were late, and then paid up to date, and then were late again 2 years later, which caused a CO, the delinquency which immediately preceeded the CO would be the second late.

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Yeah, I forgot I was reading in the collections forum and thought I was still on another thread dealing with lates, current, then late again (but never charged off).

Sorry for the divergence. I've got a work deadline on Friday and my brain is mush. Time for another cup of coffee. :)

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