Credit Questions

AsSiMiLaTeD

I'm not the richest guy in the world, but one thing I've always done is try to take good care of my credit, sometimes even at the expense of immediate needs.

My brother-in-law, however, is a different story. He makes more money, has less bills, and still has horrible credit - and really doesn't seem too concerned about it.

We got into a discussion this weekend about some credit cards from several years back that he's never paid on. He seems to think that they're just going to 'go away' after a certain amount of time.

I've heard about the whole '7 years' thing, but how much truth is there really to that? I had one late payment on a credit card back in 1998 when I was in school, and it's still showing up on my credit report, not sure how it's impacting my score at the moment but doesn't seem to be causing me any problems as my score is still 'good enough' to get whatever I need.

Does that stuff really go away after a certain amount of time? Can the credit card companies still try to collect after 7 years? IF so, then why have I busted my **** for the last 10 years to keep my credit in good shape?

Can't they take your paycheck or something along those lines?

I mention to him that if he's truly never going to pay on any of his stuff, that he should look into bankruptcy filing - but I don't really even know how that works.

As far as I am concerned, he has the ability to pay this stuff off and just chooses not to, and I really consider that to be theft. if he had cancer or something like that it would be different, but he just doesn't care.

All I know is I'm going to be pissed if he tells me next year that all this stuff has dissapeared off his credit report and now he has a 760 credit score, when I've had to sacrifice in order to keep my score that high...

I 'get' that some people have bad stuff happen and need a fresh start, but there should be stipulations that prevent people from taking advantage of the system.

Whada you guys think?

danger boy

if you have old paid off debts showing up on your credit report.. go in and get them removed. paid off debts that old should not be showing up on your credit report as bad marks against you.

AsSiMiLaTeD

Well I still have that credit card, but carry a 0 balance on it. This was just a late payment and the card was caught up the next month. Who do I talk to to have it removed?

phuz

They will not go away. He may end up with a judgment against him and yes, then they can garnish his wages. If it's not a lot of money they may not get legal, but if they do then he'll pay one way or another.

Each state has it's own statute of limitations in regards to collections. Texas it's 4 years, so they can not attempt to collect after 4 years. It will remain on your credit report for 7 years. There are a few little things that can change that or start the clock over again, but 7 years is the law in most cases.

If you still have something on there from 1998, then you can and should dispute it and get it removed. Things don't always fall off of your reports like they should.

creditboards.com forums is a wealth of information.

shack

Here is a good article:

A lot of people get the statute of limitations confused with the credit reporting time limit. While they’re both time limits related to debt, they have different effects.

The credit reporting time limit is the max amount of time credit bureaus can report delinquent debts on your credit report.

For most types of accounts, its seven years from the date of delinquency. However, bankruptcies are reported for 10 years and tax liens can be reported for up to 15 years. The credit reporting time limit is dictated by the Fair Credit Reporting Act and does not influence the statute of limitations for collecting a debt.

The statute of limitations for collecting a debt is the period of time that a creditor or collector can use the court to force you to pay for a debt. The time period starts on the account’s last date of activity and varies by state.

The statute of limitations starts on the last date of activity on the account. (Keep in mind this can be different from the date the account went past due.) Your credit report will include the account's last date of activity.

Even if the statute of limitations has expired, some debt collectors will continue to attempt to collect. They're hoping you don't know about the statute of limitations and you'll pay up if they threaten you enough. They may even file a lawsuit against you. If you are certain the statute of limitations has expired, you can use that fact as justification that you do not have to pay the debt.

Be careful not to restart the statute of limitations. Anytime you take an action with an account, the statute of limitations is restarted. Making a payment, making a promise of payment, entering a payment agreement, or making a charge using the account can restart the statute of limitations on an account. When the clock restarts, it restarts at zero, no matter how much time had elapsed before the activity

PolkThug

Always take care of your credit, it affects more things than it used to. Auto insurance companies can now charge you more for insurance based off of your credit! :mad:

CAvolleyballguy

Couple things on credit.

Credit score is affected by the amount of income you earn vs how much available credit you carry.. Ie. You earn 100,000 per year but have 100,000 in credit card avail limit even with a zero balance. You look like a danger... some people have many credit cards with zero balance (ie visa, mastercard, amex, discover, Macy's etc etc.) this really drops your score. Cancel as many cards as you can. You only need 1 visa or MC. and let's say amex if you want, but certainly dont need it.

YOu said you have an old card with a zero balance, cancel it. next, evertime you apply for one of these no interest same as cash deals, that is the same as opening a line of credit. That's what it is. Even though it is a great deal, they open that line of credit on you for 3 to 7 years. I bought a bed 5 years ago, 12 months same as cash. paid in full by the 10th month, I still carry a 5k line of credit with that company until it expires. And there is no way to cancel those lines of credit. So... avoid..avoid.. avoid same as cash lines of credit unless you really really need the purchase and cant pay it off in full.

If you want other tips, you can search online for ways to reduce your credit score... or you can email me...

as for your bother-in-law. If he doesnt need to borrow money and makes enough the bad credit wont really affect him, unless like the other op said car insurance etc..

The richest guy I know makes millions a year, never pays anyone, settles years later for half of the original bill and doesnt care because he makes millions... this guy is a contractor or small business owner's worse nightmare... You go to his huge house he "gives you" the deal to build a huge addition you think you just signed a half mil deal, you get progress payments and then when you go to collect your profit the final 100K payment he never pays you and gets the addition you just built him at you cost... does it affect him.. nope... because he can pay in full for whatever he wants...Credit scores only affect us that need to borrow money to buy stuff we cant afford. What's amazing is banks dont even want to lend you your own money... talk to a real estate developer that builds huge projects, listen to the hoops they have to jump thru to get loans and set up deals...even though they are worth millions and millions... my buddy is one and he is forever battling with banks.. its crazy..

but for us po' shleps we have to protect our credit.

wallstreet

Just because people can lie, cheat, steal, and get away with it doesn't mean that you should. I would check your brothers pockets every time he leaves your house.

shack

CAvolleyballguy wrote:

Couple things on credit.

Credit score is affected by the amount of income you earn vs how much available credit you carry.. Ie. You earn 100,000 per year but have 100,000 in credit card avail limit even with a zero balance.

****!

wingnut4772

shack wrote: »

****!

I have to say this raised an eyebrow with me as well.

candyliquor35m

No one is going to take you to court over a debt. They sell the debts to collection agencies and write the loss off as a cost of doing business. The collection agency harasses you until they realize you're not going to pay and they give up or sell the account to another collection agency.

Credit cards have an idea how many won't pay so they hike the interest rate accordingly to make up for the uncollectible accounts.

SKsolutions

danger boy wrote: »

if you have old paid off debts showing up on your credit report.. go in and get them removed. paid off debts that old should not be showing up on your credit report as bad marks against you.

If you pay them off, it will actually LOWER your score. The payment will refresh the last payment date, and it will be more 'recent' in the credit model. Whether paid or unpaid, it will stay on your credit for 7 to 10 years depending on the type of item and whether you claimed bankruptcy. There are ways to dispute non-legitimate, and even legitimate items on your report. It just takes some research, time and effort. I'm not trying to be an ****, but someone might take your advice, and end up much worse off than they started.

SKsolutions

CAvolleyballguy wrote: »

Couple things on credit.

Credit score is affected by the amount of income you earn vs how much available credit you carry.. Ie. You earn 100,000 per year but have 100,000 in credit card avail limit even with a zero balance. You look like a danger... some people have many credit cards with zero balance (ie visa, mastercard, amex, discover, Macy's etc etc.) this really drops your score. Cancel as many cards as you can. You only need 1 visa or MC. and let's say amex if you want, but certainly dont need it.

YOu said you have an old card with a zero balance, cancel it. next, evertime you apply for one of these no interest same as cash deals, that is the same as opening a line of credit. That's what it is. Even though it is a great deal, they open that line of credit on you for 3 to 7 years. I bought a bed 5 years ago, 12 months same as cash. paid in full by the 10th month, I still carry a 5k line of credit with that company until it expires. And there is no way to cancel those lines of credit. So... avoid..avoid.. avoid same as cash lines of credit unless you really really need the purchase and cant pay it off in full.

If you want other tips, you can search online for ways to reduce your credit score... or you can email me...

as for your bother-in-law. If he doesnt need to borrow money and makes enough the bad credit wont really affect him, unless like the other op said car insurance etc..

The richest guy I know makes millions a year, never pays anyone, settles years later for half of the original bill and doesnt care because he makes millions... this guy is a contractor or small business owner's worse nightmare... You go to his huge house he "gives you" the deal to build a huge addition you think you just signed a half mil deal, you get progress payments and then when you go to collect your profit the final 100K payment he never pays you and gets the addition you just built him at you cost... does it affect him.. nope... because he can pay in full for whatever he wants...Credit scores only affect us that need to borrow money to buy stuff we cant afford. What's amazing is banks dont even want to lend you your own money... talk to a real estate developer that builds huge projects, listen to the hoops they have to jump thru to get loans and set up deals...even though they are worth millions and millions... my buddy is one and he is forever battling with banks.. its crazy..

but for us po' shleps we have to protect our credit.

I looked but couldn't find a true statement. Sorry. . . TOTAL ****.

candyliquor35m

Oh and sometimes the credit agency might hire a lawyer to write you a letter threatening legal action or call you telling you that they have a claim against you in their office that they're working on.

Hang up on them and throw the letter in the trash.

I'm a little more polite then that. I tell them "I'm sorry I'm not interested" and then I hang up before they can get another word out of their mouth.

SKsolutions

candyliquor35m wrote: »

No one is going to take you to court over a debt. They sell the debts to collection agencies and write the loss off as a cost of doing business. The collection agency harasses you until they realize you're not going to pay and they give up or sell the account to another collection agency.

Credit cards have an idea how many won't pay so they hike the interest rate accordingly to make up for the uncollectible accounts.

Wrong. A CC company can sell the debt to a collection agency, that is true. If they are of a mind, they can take the debt with little or no documentation down to the local courthouse, and file suit. Maybe they have an old address on file, and arrange for the paperwork to be sent there. You don't show, and the judgment is for the plaintiff plus cost. You will then have an interest accruing 20 year judgment against you that shows up as a public record on your credit report. In some cases, lenders would want these paid prior to lending you money to buy a home.

One late CC account can be represented as a collection account, a delinquent CC account, and a public record all at the same time, so your score would plummet. Three derogatory items, one account.

There is a lot of wrong info in this thread, as there is a lot of misunderstanding regarding credit in general.

heiney9

candyliquor35m wrote: »

No one is going to take you to court over a debt. They sell the debts to collection agencies and write the loss off as a cost of doing business. The collection agency harasses you until they realize you're not going to pay and they give up or sell the account to another collection agency.

Credit cards have an idea how many won't pay so they hike the interest rate accordingly to make up for the uncollectible accounts.

candyliquor35m wrote: »

Oh and sometimes the credit agency might hire a lawyer to write you a letter threatening legal action or call you telling you that they have a claim against you in their office that they're working on.

Hang up on them and throw the letter in the trash.

I'm a little more polite then that. I tell them "I'm sorry I'm not interested" and then I hang up before they can get another word out of their mouth.

This is the most irresponsible advice you've given out so far and is simply not true. Most unsecured debt collectors won't take you to court but they have every right to and it can happen as long as the statue of limitations hasn't run out on the debt.

I know friends and family members who have been taken to court and have judgments rendered against them as well as wage garnishment for unsecured debt. I have a friend right now who is paying off an old car loan for a car she hasn't had in over 7 years. The bank took her to court just recently and a judgment was rendered against her and she is paying off a loan for a car that has been in the junk yard for quite awhile.

It is their absolute legal right to sue for unpaid debts and they can have a court force you to pay. It's not all that common for small unsecured debts to be taken to court but it absolutely can be done. There becomes a point of diminishing returns for the creditor to just write the debt off and sell it to a debt collector who also has the right to take you to court and force you to pay.

There is no longer a debtors prison like in the old days where if you didn't pay your debts you could be put in jail. That doesn't happen anymore and hasn't happened for quite some time.

Ignoring it doesn't make it go away but it may force the creditor to decide if it's worth legal action.

H9

heiney9

damn double posting

shack

I have a client that buys millions of dollars of bad debt each year. Lots of it medical, some of it CC. He has two attorneys on staff, and all they do is file legal claims in court. 95% there is no response from the debtor and they get a judgement. If/when they locate the debtor it is very simple to get a lien or garnishment based on the court judgement. Throwing away a notice of debt is the stupidest thing you can do. Fight it if it is beyond the Statute of Limitations, call them an let them know the futility of trying to collect the debt if you have nothing (often they will realize the futility and there is a good chance they will go away), but ignoring it will only make it worse.

BTW...income has ABSOLUTELY NOTHING to do with one's credit score.

candyliquor35m

heiney9 wrote: »

There is no longer a debtors prison like in the old days where if you didn't pay your debts you could be put in jail. That doesn't happen anymore and hasn't happened for quite some time. H9

So tell me again why she is paying if they can't put her in jail. You lost me there.

How much has OJ paid on the judgements against him. I don't see him in jail.

heiney9

candyliquor35m wrote: »

So tell me again why she is paying if they can't put her in jail. You lost me there.

How much has OJ paid on the judgements against him. I don't see him in jail.

Why is she paying it off, because if she doesn't do it voluntarily (comply with the order of judgment) they will garnish her wages.

As far as OJ since there is no debtors prison that's why he's not in jail. You know you must take some kind of mind altering drugs. The OJ question was self explanatory. There is no debtors prison hence he's not in jail for not paying his debt.

H9

shack

They can't put you in jail...but they can attach assets...ANY ASSETS thay you may own. Bank accounts, autos, personal assets, real estate and/or garnish your wages.

candyliquor35m

I would say the chance of getting taken to court over a bad debt is about the same likelihood as winning the lottery.

And then the chance of them ever collecting is about the same chance as getting struck by lightning.

This is a myth that the credit companies and society in general wants everyone to believe to get them to pay off their debts.

shack

All I have to do is to get a court order and then call a sheriff's officer and off we go to pick up property. Defying a court order to reliquish assets will put you in jail...not for owing...but for refusing to obey a court order.

heiney9

candyliquor35m wrote: »

I would say the chance of getting taken to court over a bad debt is about the same likelihood as winning the lottery.

And then the chance of them ever collecting is about the same chance as getting struck by lightning.

This is a myth that the credit companies and society in general wants everyone to believe to get them to pay off their debts.

You need help!! You don't live in the same reality as the rest of us. It happens all the time. How on earth is it moral to run up a bunch of debts with other peoples money and then just walk away. If you think that's acceptable, there's something seriously wrong with you. I hope to God you are just trying to be controversial as is your typical game you play here on CP.

shack

candyliquor35m wrote: »

I would say the chance of getting taken to court over a bad debt is about the same likelihood as winning the lottery.

And then the chance of them ever collecting is about the same chance as getting struck by lightning.

This is a myth that the credit companies and society in general wants everyone to believe to get them to pay off their debts.

Your really don't have a clue do you?

dkg999

+1 on both H9's and Shack's comments.

I have been involved in credit card marketing for close to 25 years, consulting with some of the biggest US banks, Canadian banks, and now banks in Mexico and Brazil, as well as large retailers offering house cards. The good ones know how many people are going to charge-off, who they are, and leverage it for the tax advantages.

I designed, built, and managed skip tracing and fraud detection systems for the largest company in the transaction processing market for several years. If you owe enough money, they will find you. It's still hard to hide, at least in the US.

I now work for the largest credit bureau in the world, and fortunately I work on the marketing services side of the business, because spending one day in our customer support center and listening to the horror stories (and the whiney stories about why they aren't responsible for something) would drive me absolutely over the edge!

It's really simple. If you borrow money, pay it back. If you are having trouble paying it back, then work out a plan with the lender that has as a term that if you meet the new payment plan, they won't report you as delinquent to the credit reporting agencies. If you owe enough money, it is profitable to collect, sue, garnish, whatever it takes. You might get a pass if you owe small amounts, but if you owe enough small amounts to several lenders we're going to put it all together and sell it to the high bidder to be collected. If you have no hope of paying it back, file bankruptcy. Just hoping it will go away is a really bad plan. If you have something that isn't right on your credit report, the fastest way to fix it is to have the company that reported it send in a correction to the credit bureau's.

candyliquor35m

So let them take the sofa I paid $10 for at the thrift store

I'll give them some free cat food if they take my cat too

shack

Another "expert" added to the ignore list...I should have done it when he brought up all that crap about mercury/immunizations/etc...

To quote BDT... "CRACKPOT!"

heiney9

shack wrote: »

They can't put you in jail...but they can attach assets...ANY ASSETS thay you may own. Bank accounts, autos, personal assets, real estate and/or garnish your wages.

I'm in title insurance and I see judgments attach to property all the time and guess what if your married and it's a judgment against your wife and you own the property jointly and then get divorced and want to sell the property her judgment is still attached to the property even thought you are no longer married. I've seen it happen with parent and sibling jointly owned property as well.

Candy...........come back when you actually know what you are talking about. In that case we'll never see you again here at CP.

H9

SKsolutions

candyliquor35m wrote: »

Oh and sometimes the credit agency might hire a lawyer to write you a letter threatening legal action or call you telling you that they have a claim against you in their office that they're working on.

Hang up on them and throw the letter in the trash.

I'm a little more polite then that. I tell them "I'm sorry I'm not interested" and then I hang up before they can get another word out of their mouth.

More often then not, the owner is or was an attorney. It seems to be an industry of disbarred attorneys, but that may just be my experience.

Take the letter and find out what account they are calling about. It may be someone with the same name, and they are tracking them down. Get as much info from them, but Never give them any information about yourself. If you believe the account is yours, tell them you dispute the account, and have them send you everything. If they are local, mail them a certified letter stating that you are going to exercise your right of inspection in 5 business days. Go to their 'office' (a witness is helpful) and let you look through any file they have one you, and a give you a copy. If they just have a computer printout with your name on it, with no 'information piece' from the original creditor, walk out laughing loudly.

Depending the type of the account, there are certain rules to follow, and chances are they don't have clear title or the information piece for chargeoffs.

F'em. Chapt 93A them, and wait 28 days. When you haven't heard from them, and even if you have, call them and ask them: "Have you notified your licensure (Division of Banks), that you have impending 93A action. . . . as you are required ? ? ?" Wait for the stuttering to start! Tell them to remove it immediately, or that you will buy it for what they paid for it (often .02 on the dollar).

The FTC and every other agency is a waste of your time, hit em where it hurts.

Your state may vary somewhat, but the ruling statues of the FCRA, and Chapter 93A, et al, are federal.

I am not an attorney, nor giving legal advice.

candyliquor35m

I have at least 2 experiences or I wouldn't be commenting on this.

I had some dental work done maybe 15 years ago that I wasn't happy with and never paid for. Nothing happened.

Maybe 7-8 years ago, I didn't pay my last cell phone bill when I switched companies and got 500% more anytime minutes than before. Nothing happened.

Collection companies prey on the weak and rely on harassment and lies to get ppl to pay.