PFD or wait it out

[Waititout]

I currently have 6 charge offs. 1 has been sold to a CA and 1 other shows a balance of $0 which from reading here means it has probably been sold as well. The balances on a couple of them are significantly higher than they should be, but I could make 10-20% PFDs on the original balances if they would accept the deal.

I have copies of my reports, I have opted out, and I have disputed all of the tradelines which have been verified.

The kicker is that all of these accounts are scheduled to be removed from my report between February, 2012 and August, 2013. I will not be buying a house in the next two years and if I get a car, I can pay cash for it. In other words, I don't think I will need to borrow money for anything.

So, what would you do?

[Lian]

I presume that all are past SOL expiration based on their age of around six years, so you apparently have no legal obligation to pay if sued and you assert an SOL defense.

I would never recommend not paying a debt. That is a matter of some moral consideration that is up to the consumer. However, I will comment on the implications.

It depends upon whether you have concerns about old, unpaid debt remaining in your credit file. When the CR exclusion period of 7 years plus 180 days from DOFD on the OC account has expired, they, of course, will be excluded from view in your normal credit reports that are attainable through a normal inquiry.

However, the derogatory information, in this case unpaid charge-offs, are not deleted from your credit file, but are excluded from view when a normal inquiry is made. Under certain restricted circumstances, as defined in FCRA 605(b), old derogatory information may still be viewed, regardless of expiration of its 605(a) exclusion date. Those circumstances include requests by a creditor or potential insurer when you apply for credit or insurance having a principal value of $150,000 or more, or requests for employment purposes when the job has a salary of $75,000 or more. So the potential is still there, although under admittedly rare circumstances, for that information to still be requested and viewed.

If you apply for a mortgage in the future, and they ask you if you have any old unpaid debt, and you answer no because its CR inclusion date has expired, they may discover that debt should they be authorized to pull an extended CR based on your entire credit file. That raises issues of accuracy of statements in your loan application.

If you are not concerned with that possibility, and if the SOL has expired, and you can wait until the normal CR exclusion period has expired, then you could choose to ignore repayment.
Its your call.

[Waititout]

They are all absolutely beyond the SOL. I have chosen to ignore any moral obligation as I believe I have repaid a reasonable and fair amount....reasonable and fair morally and not legally or what I agreed to which is a whole other can of worms. (If my interest rate were far lower from inception and every single late fee were removed, I believe my balances would be very close to zero).


You bring up some excellent points. I could see myself looking for a house that costs over $150,000 in my future as well as the possibility of a salary over $75,000. I think I will look at a pay for delete. Thank you very much for you help.

[Hal Jordan]

I will throw my hat in the ring in here and give my .02 cents. First, I am not going to give you moral advice or judge you... Just say that I believe it unlikely you would ever get an extended credit report pull. I recently ran into an old friend of mine while out for drinks that is now a loan officer for Bank of America and we got to talking and I was fairly candid about some stuff in my credit file and stuff that has either fallen off or stuff i've PFD'd. And he told me that stuff that is close is better to wait and let if fall off. He even told me that they instruct people in that situation to re-apply in six months to a year if they have some items that are about to fall off due to age.

While what Lian told you is certainly possible. It is IMO not very probable. According to my loan officer friend the pulling of extended credit reports is next to never.

Could it be different with Wells Fargo or First federal or some other large lender? Of course.. but I've read a 100's of posts in the last several months about people getting approved for $200K+ homes all the time by waiting for charge offs to disappear. One I read about last month was a $15K charge off that poster waited on to fall off and applied for a $240K house loan and was approved with a fico score of 690 AND he got 5.1% interest!!

Originally Posted by Waititout

They are all absolutely beyond the SOL. I have chosen to ignore any moral obligation as I believe I have repaid a reasonable and fair amount....reasonable and fair morally and not legally or what I agreed to which is a whole other can of worms. (If my interest rate were far lower from inception and every single late fee were removed, I believe my balances would be very close to zero).


You bring up some excellent points. I could see myself looking for a house that costs over $150,000 in my future as well as the possibility of a salary over $75,000. I think I will look at a pay for delete. Thank you very much for you help.

[Lian]

I totally agree with Hal.

In the years I have been involved in credit forums, I have only seen one post on another credit forum that involved a potential creditor actually requested a full, extended credit report after its normal CR exclusion date. It is apparently not standard practice, and I did not mean to imply that it is likely. My intent was only to make you aware that it is possible.