Legal Question in Consumer Law in Georgia

The statute of limitations for suing on a debt has nothing to do with a debt being on your credit report. And besides, the statute of limitations is only a defense that you can raise in court in a timely filed answer if the junk debt buyer sues you or if you are disputing the debt. Just because the statute of limitations has expired does not mean that the debt cannot stay on your credit report.

It does not matter when the debt collector bought the debt. That is not relevant. The date of last activity should be the last time that you paid or the date of the delinquency. If the debt went last delinquent around March of 2009, then it can stay on your credit report until around September of 2016.

If you want to buy a house, there are a couple of things you can do:

(1) get a copy of your credit report from all 3 credit bureaus (Equifax, Experian and Trans Union);

(2) See who owns the debt. If you truly have proof that you cancelled the debt, then you can send a certified letter to the junk debt buyer explaining why you do not believe that you owe the debt. Ask them to investigate and remove. If they do then get a letter from them to this effect.

(3) They may be unwilling to do that if you have no proof. If that is the case, you have 2 options depending on how badly you need to buy your house; (a) you can pay/settle or (b) you can wait until 2016 and the debt will be removed automatically. If not, you can then legitimately dispute the debt.

(4) If you are paying the debt in full, then you can ask the junk debt buyer for a "pay for a delete." You can explain that this was a big mistake and should not have been on your credit report but you need to get it off and will pay. Its not legal for a debt collector to remove derogatory information that is correct, but if you can persuade them this was an error they will do the "pay for delete."

(5) If the debt collector does not want to do the pay for delete, then don't pay in full. Offer 25% of the balance of the debt and see if they will accept. In no circumstance offer to pay more than 50% if they will not delete this. Make sure that you get a settlement letter advising of the original creditor, original account number and full balance owed as well as the settlement amount. The letter should indicate where you send payment, to whom payment will be made and by what date. The letter will also state that upon payment and clearance of the settlement, no further collection efforts will occur and you will not owe any money and your credit report will be updated to reflect that settlement of the debt (it will be paid collections/pr paid settled or something similar).

(6) Pay by certified check or money order and make a copy before you send. Send the check/money order via UPS or FedEx so you will need a physical address from the junk debt buyer and not a PO box. Keep the copy of the money order FOREVER. You do this so you can prove that you timely sent the settlement and that the junk debt buyer got it by the due date. Do not rely on the US mails to deliver or send certified.

(7) 30 days after you make your payment contact the junk debt buyer and get a closure letter from them acknowledging that they got your payment, that your credit report will be updated and that no further monies are owed. Keep the letter forever.

(8) Make a copy of the letter and your money order and write to each of the 3 credit bureaus and ask them to note that the debt has been settled. Attach the copies of the closure letter and the check to the credit bureaus. If the junk debt buyer has removed the account, then instead send a copy of this letter to the 3 credit bureaus and ask that they remove the item.

(9) You can go and apply for your mortgage after 30 days as your credit report should be updated. The mortgage lender uses its own credit reporting system. If the debt stills shows up as unpaid on it after you settled/paid or still shows up as unpaid if the junk debt buyer agreed to remove it, show the mortgage lender the copy of the closure letter and check or copy of the removal letter. Ask that the mortgage lender use "rapid rescore" to score you without the negative information.

If you need assistance with any of these steps, then please email me at [email protected]. I can assist with the proper letters or settle the debt for a reasonable fee.

One final word - just because you asked them to cancel because your contract was at an end may or may not be correct. The cell phone companies are sneaky - what they do not tell you is that any time you make a change (either change your minutes or add/drop features) it is considered a change that serves to extend your contract. If your contract was really over and you cancelled, you should receive one more bill at most (depends on when you cancelled and what your end date for billing was). What happened then? Did you pay? Was your contract really at an end when you cancelled? If it was not, then most cell phone providers charge an early termination fee of $175. Depends on how many phones or lines or contracts you had - it could be more.