Archive for the ‘charge offs’ Category

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Collection Laws – Top Five Debt Collection Laws and Charge Off Laws

Did you know that there are more than 20 laws that protect somebody with a debt collection or charge off? Here are the top 5 debt collection laws:

Law #1: Right to Counsel

Disputing a collection or charge off with the creditor and credit bureaus can get ugly. Historically, credit bureaus have been fined multiple times for ignoring credit disputes.

A charge off or a collection listing on your credit history is big deal. It can keep you from owning a home, getting loans for transportation, or getting credit for much needed medical care.

That’s why you have the right to hire a credit lawyer who can dispute charge offs on your behalf. (Don’t listen to a credit bureau worker or banker when they say you can’t get credit repair help.)

Law #2: the FCRA

The Fair Credit Reporting Act was enacted in 1970. It is the federal law that regulates consumer information. Along with the Fair Debt Collection Practices Act it exists to protect you, the consumer.

Under the Fair Credit Reporting Act creditors have only a MAX of seven years to report your delinquency to the credit bureaus. – That’s seven years from the time of the original first delinquency.

Seven years is a very long time. You don’t have to wait the entire seven years however. Seven years is the MAX. You can take action at any time to dispute and erase a charge off. Consider sending a dispute letter to the credit bureaus reporting the negative information.

Law #3: State Law

Each state has its own laws regarding statute of limitations and debt. This means each state regulates how much time is allowed for a creditor to sue you for a debt.

You might be surprised to learn that collection agencies sue people every day for charge offs (which then result in judgments) way past the statute of limitations. It is no one’s responsibility but your own to raise the question of statute of limitations.

Law #4: Debt Validation

It is your right to ask a creditor for a validation of debt including charged off debt. If the charged off account is now in the hands of a collection agency, then by law they must provide you with the name of the original creditor and the amount owed.

They might not do this and you’re stuck with the charge off. Debt validation is more advanced for the do-it-yourselfer. I had Lexington Law file debt validation – which worked because the collection agency immediately erased the charge offs. Here’s the debt validation hotline number: 1-800-298-4297.

Law #5: Demand Proof

Even if the creditor/collection agency has provided a validation of the charged off debt, it is your right to request additional proof.

By law they must provide you with a copy of any and all contracts you signed concerning the debt. You can also request them to provide you with a copy of the last bill right before the account was charged off.

* We were so impressed with Lexington Law that we decided to become a sponsor and put up this website.

A charge off on your credit report is very damaging to your credit score and your ability to obtain credit. Interpreting the laws and knowing which apply to you can be confusing. To chat with a charge off expert, call this number: 1-800-298-4297. There’s no charge and you’ll get answers you’re looking for.

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Remove Charge Offs

Check out this video on how to remove charge offs:

If you have a charge off on your credit report, perhaps you’re wondering just how much it will effect your credit score? Can you still get new credit even if you have a charge off? Maybe just one or two charge offs won’t hurt your score that much?

Sadly, there is no concrete answer to how much a charge off effects your credit score. Exactly how one negative item will affect your credit score is somewhat of a mystery and has been the subject of much criticism of the three main credit bureaus. The bureaus use top-secret algorithms to calculate your credit score.

In other words, the bureaus don’t want you to know how a charge off on your credit report affects your credit score. We DO know that it will differ from one person to the next.

To determine how much that charge off is damaging your credit score, consider these factors:

Your Payment History

Payment history refers to how you have been paying your bills and installment loans. How often have you missed payments? How long have you let payments fall past due? 30 days? 60 days? More than 180 days?

This pertains not just to the charge offs – which usually indicate a late payment of 180+ days, but your other accounts.

Has anyone sued you for payment? Have you also defaulted on a student loan or a car loan? If you have any of these negative entries on your credit report then your score is already in the dumps and a single charge off will only lower it 10-15 points.

On the other hand, is your credit report in good shape other than the charge off? If so, then expect that charge off to lower your score at least 50 points.

Other Amounts Owed

This not only refers to the obvious: how much money do you owe your creditors but also how much do you owe in relation to the credit limits on your accounts.

Are your credit cards maxed out – BAD!
Do you have a lot of “cushion?” – GOOD!

How many accounts do you have that show unpaid balances? Even if you’re paying your bills on time, if you have a large number of bills they could be affecting your credit score negatively and lenders see you as a risk.

Length of credit history

This is a BIG factor! How long have been responsible (or irresponsible as the case may be) with credit? If you’re 18 years old or somebody who refuses to use credit cards, then don’t expect to have a good credit score.

Does your credit report show you as being a trust worthy borrower? How about new credit? Have you been applying for lots of credit recently?

Having a number of hard inquiries flags lenders that you might be looking to make a number of large purchases or maybe you are short on cash and need to open credit to make ends meet in the short term.

Here’s the bottom line: No one can tell you exactly how much one charge off will lower your credit score but the people at Lexington Law Office know more than anyone. Since you already have one charge off, it’s probably a good idea to get a consultation on your entire credit report. They are available to advocate from 5 am west coast to 9 pm west coast time.

* We were so impressed with Lexington Law that we decided to become a sponsor and put up this website.

We used them – and it worked! They helped us remove charge offs from our credit report and clear up our credit of all bad credit items. Get a FREE credit consultation with credit repair experts by calling 1-800-298-4297

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Buying a Home with Bad Credit and Charge Offs on Your Credit

First, the good news: Nobody knows what it’s like to try and buy a home with bad credit or charge offs on your credit history like we do. My wife and I had dozens of charge offs and collections on our credit reports when we applied for our new home mortgage.

Second, the bad news: mortgage lenders will probably NOT approve your home mortgage if you have bad credit items or charge offs on your credit. However, don’t give up. You can legally and ethically delete almost any questionable item and charge off and get into that new home!

If your experience is like ours was, your home buying process went something like this:

  • You and your partner go to open houses and get excited to buy a house
  • You find a house you REALLY want, but don’t have financing yet
  • You go to bank and they run your credit report
  • The banker dude or lady comes back and tells you how bad your credit is
  • You think…”Oh SH&T, how am I going to get that house?!”

If you’re thinking – “YEAH, THAT happened to me.” Here is some advice from experience:
Get a pro to handle the mess of removing the charge offs and other nasty items. We tried sending out credit repair letters, but only dug a deeper hole.

You need to know HOW to dispute bad credit. (You can’t over-dispute or else your file gets a RED FLAG attached to it, which makes credit repair way more challenging.)

We used Lexington Law who got rid of our charge offs just in time to close on a new home in the suburbs of Rochester. (See the full story of how we bought our house with bad credit here)

If you’re the forward thinking type and have planned ahead and you know SOMETIME IN THE FUTURE you’ll need to get your credit in shape to buy a house, then the next paragraph is for you:

Don’t ignore those charge offs – Act Now!
Ok, you’ve got a couple options to remove those charge offs. Again, we used Lexington Law who does more than just file dispute letters. Removing these chargeoffs can be like a science.

They used debt validation and a few other more ‘underground’ methods when a dispute letter just doesn’t cut it. If you’re curious about how it’s done, you can give our paralegal – Beth – a call. Here’s her direct line: 1-800-298-4297.

* We were so impressed with Lexington Law that we decided to become a sponsor and put up this website.

Finally, some good news again: You’re planning ahead. Since charge offs are one of the biggest reasons consumers are denied home loans, it is good idea that you’re taking steps TODAY to get into that new home!

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