Re: FCRA clarification

Posted by lawguy (216.30.212.58) on April 10, 2003 at 15:34:36:

In Reply to: FCRA clarification posted by Linda-nator on April 10, 2003 at 14:35:40:

Your right, under the FCRA paying a debt in full, or making a partial payment, should not restart the reporting period.

However, what happens is a consumer pays a "settlement" amount. The current creditor considers it paid in full, but then sells the remaining balance out. As the consumer is now "current," the previous DOLA should remain the same. However, the purchaser of the remaining balance now has a delinquent account, and reports it as such, starting a new DOLA. Hence, the consumer pays a debt, assuming it to be over and done with, but now has a new 7 year blackmark on the CR, as well as a new hungry creditor with his hand out.

Further, and more importantly, a partial payment will, in all but a few states, restart the SOL for suing on the debt, even if the SOL has already run.

As a creditor will almost never remove a blackmark on the CR, and all the consumer gets is a new SOL date for lawsuits, a new creditor tying up his phone lines, and usually a new 7year mark on their CR, as well as being out the money used for making the payment, there really is no incentive to pay and every incentive not to pay.

Besides, who wants to make life easier for, and send money to, somebody who calls them names and threatens them with jail...

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