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Does Date of Settlement Reset 7 year CRTP?


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Well, the information supplied is always controversial - for example:


Re-aging debt

Consumers should be aware of a practice called re-aging of old debts. The clock on the statute of limitations may start anew if a consumer makes a payment -- even a small amount -- on a debt that has exceeded or is approaching the end of the statute of limitations. Acknowledging an old debt may also extend the time limit on potential debt collection lawsuits. Consumer advocates now advise debtors not to acknowledge old debts or debts they don't recognize as their own to avoid inadvertently re-setting the clock on the statute of limitations.

"Any new activity on it could re-age it and make it more collectable," says Lauren Saunders, managing attorney for the National Consumer Law Center, a consumer rights group. "You're better off ignoring a call about an ancient debt. It's best to send them a lettersaying I don't recognize this or please verify it."

And another:


Statutes of limitations vary widely by state, and by the type of debt, according to attorney John Lamb, co-author of "Solve Your Money Troubles: Get Debt Collectors off Your Back & Regain Financial Freedom." States often have different rules for oral and written contracts, as well as for "closed-end" contracts such as installment loans and "open-ended" contracts, which typically (but not always) include credit card accounts.

Continued: Make sure you're covered

California, for example, has fairly short statutes of limitations on most debts: two years for oral contracts and four years for written contracts, promissory notes and credit card debts. Kentucky, by contrast, says creditors can sue over written contracts for 15 years after the last payment was made, and for five years on most other debts, including credit cards.

Some other key points about statutes of limitations:

The devil's in the details. Not only do states have different statutes of limitations for different debts, but two states may treat the same debt differently. A credit card debt might be considered an open-ended account in one state and a written contract in another. The only way to know for sure is to check your state laws or consult an attorney.

You can inadvertently restart the clock. Generally, the statute of limitations starts ticking from "date of last activity" on the accounts, said Los Angeles bankruptcy attorney Scott Bovitz. (If the account is still listed on your credit reports, the date of last activity should be noted there.) On a credit card debt, that could be the last payment you made or the last purchase you charged. But in some states, Lamb said, making a payment on an old debt, agreeing to an extended repayment plan or even acknowledging that the debt is yours can extend the statute of limitations or restart the clock altogether.

A creditor may still sue you after the SOL has run out. Suing or threatening to sue you after a statute of limitations has run out violates the Fair Debt Collection Practices Act, Lamb said, but that doesn't mean it doesn't happen. To prevent the creditor from winning a judgment against you, you'll need to show up in court and point out that the statute of limitations has expired.

The creditor may try to pick a better venue. If you sign a credit contract and move to another state with different limits, the creditor may try to sue you in the state that has the longer statute. If that's not the state in which you currently live, Lamb said, you should protest: "The general rule is that the state you live in" is the one whose statutes should apply.

Debts can still exist even if the creditor can't sue. Some people erroneously believe that debts are erased after the statute of limitations has run out. Although the creditor's ability to sue you has been curtailed, it can still try other methods to persuade you to pay, including calls and letters. The debt can also be sold to another collector that can renew efforts to get you to pay. A legitimate debt is truly erased only when it's paid or erased in bankruptcy court.

And the other side of the coin:

http://www.carreonandassociates.com/articles/7year-rule.htm ()


Is an old debt sitting on your credit reports for longer than it should be? Don't be surprised- you are not alone. There are many misconceptions about debts charged off prior to 1996 and it is probably one of the most common questions we get. Often referred to as the SOL - statute of limitations for credit. There are actually 2 things to worry about. The SOL for reporting bad credit and the SOL for collecting debts. Both have their own time limits. A charge off is the term a creditor uses when they write off your debt because you didn't pay it back. You CAN be taxed on that debt!

Charged off debts and how long can they remain on your credit reports? You have to remember, the old FCRA (before revision) was very ambiguous, which means, even though it was not specific for saying exactly when a date commenced, it was often thought that making a payment could renew the statute of limitations and the seven year clock would start all over again.

Consumers were very worried about this because it was a catch 22 in their mind. If I pay a portion of it, they can come after me again and it will stay on my credit for another 7 years so why bother? That was the general consensus and trying to get a straight answer out of a debt collector or the credit bureaus was even more frustrating.

Wiki Fact

In accounting and finance, bad debt is the portion of receivable that can no longer be collected, typically from accounts receivable or loans. Bad debt in accounting is considered an expense. The creditor will report bad debt losses to the IRS.

There are two methods to account for bad debt:

Direct write off method (Non - GAAP)

A receivable which is not considered collectible is charged directly to the income statement.

Allowance method (GAAP)

An estimate is made at the end of each fiscal year of the amount of bad debt. This is then accumulated in a provision which is then used to reduce specific receivable accounts as and when necessary.

I think there is always going to be a controversy about restarting of the SOL; alot of people argue that "charge off" and "bad debt" is a ledger entry an does NOT, if fact, make a debt "uncollectible."

Furthermore, I think a general statement can be dangerous: the enforcebility of bad debt can fluncuate state to state.

I'm generally happier to play by the "better safe than sorry" rules. It's also worth remembering that CA/JDB's rarely play by ANY rules, and always going to find ways of subverting or twisting the law to their favor. If they can find an avenue to screw you, they will take it.

Here's only ONE way they get away with it:

(edited for readability)

C. MCM's Arrangement With Its Credit Card Partner

As noted, the Notice states that Defendants "may disclose" information it collects to "other financial institutions with whom we have joint marketing agreements." This was not a mere possibility; in fact, Encore has a "joint marketing agreement" with a major credit card company for a balance transfer program. Encore described the Program in its 2003 annual report:

Account Balance Transfer. We may transfer to our credit card partner accounts with a low expected value or those for which collection efforts have failed. The credit card partner may offer the debtor the opportunity to put the balance on a credit card. If the account is transferred we receive an agreed upon payment. We retain the ownership of and the ability to collect on the charged-off accounts that the card issuer has solicited until a successful balance-transfer has occurred.

More specifically, Encore first selects a group of accounts as likely eligible for the Program; MCM then sends debtors' name, address, and account balance information to its Credit Card Partner, and the Credit Card Partner then decides which customer accounts will be solicited for the credit card offer. MCM sends a letter to the account debtors that the Credit Card Partnerwill accept, signed by MCM (and Encore) CEO Black, advising them of the offer. If the debtor chooses to participate, and transfers the balance of the debt MCM is attempting to collect onto the new credit card, that debt is paid off and a new debt is incurred with the Credit Card Partner. 11 After the customer makes an initial payment on the new debt, the Credit Card Partner pays MCM a percentage of the amount of the balance transfer.

Sometimes they will re-age it just because. Is it legal? Maybe not. That being said, it sometimes it takes serving them with summons outlining their violations to remember what the rules are and that they have to play by them.

If you pay them, be prepared for the worse case scenario AND expect an argument from them!

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