Maintaining good credit could be challenging, particularly after a life-altering event like job loss. Understand that if a creditor throws in the towel and charges off one of your debts, that does not mean that you’re in the clear. Even if the record has dropped off your credit score, financial debt collectors might still be able to legally hound you. Article source – Beware phantom debt pains from charge-offs by MoneyBlogNewz.
Good part to charge off
There are several credit history charge-off scenarios. Consider this one. You might get something dropped off your credit score but nevertheless owe money on it. This is because, states Bankrate, there are different financial debt collecting and debt reporting rules to go by. The Fair Debt Collection Practices Act (FDCPA) provides the guidelines for financial debt collection, while the Fair Credit Reporting Act (FCRA) holds jurisdiction over how a charge-off is reported.
On the plus side, the FCRA mandates that a charge-off must be removed from your credit history after 7 years. That includes whatever financial debt collection agency owned the financial debt. Check your credit score about a month after the charge-off is designed to occur. Dispute the bad debt with Equifax, Experian and TransUnion if it is still there.
You can't charge off Chapter 7 bankruptcies, student loans or tax liens.
Charge off financial debt does not necessarily leave
FCRA rules help people out a bit. It keeps bad credit from staying on a credit history forever. The FDCPA does not have the exact same rules though. Financial debt collectors can still bother you for money. As there is a lucrative secondary market that purchases bad debt, there is still cause for concern on the part of the consumer who needs debt repair. At least once, an agency will make an effort to collect from you. A charge-off won't happen until then.
Taking out charge card debt has become more common. This is because joblessness has kept individuals from spending money. A customer can get from the charge cards though due to a statue of limitations. The state and court system will determine how long this time period is although it’s usually 6 to 10 years for installment loans, auto loans and pay day loans and 4 to 6 years for charge cards. If you need to know, specifically, talk to you state's attorney general.
Financial debt collection law
Nobody can contact you about financial debt anymore if it has been charged off past the statue of limitations for state. You can do a counter-suit if a debt collector continues.
Legal action will require time, money and the advice of a lawyer, however. What should you do if a debt collector is pursuing you legally then? Just settle or pay the financial debt for the easiest way out.
Information from
Bank Rate
bankrate.com/finance/debt/debt-dropped-from-credit-report-still-owed.aspx
Equifax
ai.equifax.com/CreditInvestigation/
Experian
experian.com/consumer/cac/InvalidateSession.do?code=DISPUTE
Trans Union
annualcreditreport.transunion.com/entry/disputeonline
How to deal with collections
youtube.com/watch?v=9SVFdH0Ayco
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