point well taken.... lesson learned.

Thanks for sharing that... I'm sure that you're not the only one in this situation.

no, i wont be settling this account. I feel that it was partially the cell phone company fault because they allowed it to go that high. Also I am young and by time this is removed from my account i would have just graduated from University. Like Ray informed me the SOL date for me has passed and Transunion confirmed for me as Ray mentioned i only have 3 years left for it to be removed--this doesnt depend on whether i paid it or not or whether it gets transfered to another collection agency. So i'm fine, learned a hard lesson.

ashleighob

Thanks for posting this... it's got to know that handing your cell phone out is like handing out an unlimited credit card.... $30,000 is nasty.

You could probably settle the debt with the cell phone company. There's not much else for recourse as you put that person's name on the cell phone.

Just curious, were you good friends with that person?

Thanks so much RAY! i feel so much better, you know today i applied for a job at Bell and money mart and i would have gotten both of these jobs but they do CREDIT CHECKS!! WTF?! i swear thats an infringement on my Charter rights and freedoms. I think i am going to go to law school, there is just to much social injustice--im in my 2nd last year in Criminal Justice Ba, all the more important this debt disappears!!!

Do you mean $30,000 or $3000? In either case, wow!

No, the bad debt will stay on your file for 6, not 7 years from the "date of last activity" on both your TransUnion and Equifax reports. In fact, it's 6 years for all the provinces in Canada, not just Ontario.

You're right about the 2 year SOL. If they sell the account to a debt buyer, a separate entry for the item will appear under the "collections" section of the credit reports as well as having it remain in the "trade" sections. Aktiv Kapital and ARO are the 2 largest scavenger debt buyers but there are dozens more out there. If it is sold, expect the buyer to put hard inquiries on your credit reports also. No big deal though.

Lastly, the "date of last activity" is defined slightly differently by each of the 2 major credit bureaus in Canada. Equifax's definition is a tad looser than TransUnion's. Irregardless, they refer to the date when the account ORIGINALLY went delinquent. Making subsequent payments on it years later or having it sold off or never paying it does NOT affect the date of last activity.

See the Nov. 11, 2008 post below re my discussions with the 2 bureau legal depts. for details.

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Ray

I actually have a problem with debt i am not sure how to deal with too. I let this girl (used to be friend but doesnt deserve that title) use my cell phone, I put her name under my account while I went to school in florida. She told me the account was paid off and closed. I checked my credit report about 2 years later come to find out she chargd up 30 000.00 in cell phone charges in a span of 2 months. I do not want to pay a PENNY to this account and the girl has already claimed bankruptcy so I can't sue her. My step dad told me to leave it alone and it will disapear in a total of 7 years ( i have 4 years more to go). However my bf told me that collection agencies actually can sell the account to another collection agency making the 7 year wait period start again because it would be counted as "new activity". Is this true? Also I need to know, I live in Ontario has the statue of limitations for the collection agency passed for them to sue me? It think the SOL is 2 years.

Anyone who can help please HELP!

Thanks for your help everyone. I will let keep you posted on what happens next and how much I am able to settle for.

The funny thing about it all is its not like the collection agencies mind breaking the law,so they must really have some fear about doing this.

Just returned home and got caught up on this thread. Damn, this is a hot and informative topic I see..

Ray and ZacksDad, thanks for addressing my question. It now makes sense why an agency cannot stipulate in the contract that all derogatory remarks relating to the account being settled will be removed from the bureaus. I guess I hadn’t considered that they’d be breaking the law issuing a contract with such a clause included.

Side note: I wonder how many agents know about this rule; and, of the naïve ones who don’t, how many of them would “talk it up” in a telephone discussion? No answer required, just thinking out loud.

O.C.

Have no fear, you basically did the right thing. Expect a call back real soon from the collection agencies. They always call back once they've tasted blood (money) Hell, for them Blood =Money.

They know what they can settle for. They have that info from the creditor already. That doesn't mean that you should just give them what they ask for. In fact, you should only offer them a percentage, even if they have to make a special call to the creditor to get it approved.

If you are negotiating, it's a real good idea to get a signed offer in your hands fiirst. Make sure it's not signed "Director" or "Manager" They're always pulling that trick. Remember, that piece of paper is all you have once you send them the money. Only offer them well below what they are asking for. They will scream it's impossible and hang up, maybe repeatedly - but they will always call back if they think there's even a nickel to be had. Be patient, let them phone back several times. They will try to take advantage of your youth and inexperience.

She wanted to use the fax because the end of the month is near and collectors are so greedy and insecure, they all want the money the same day. Otherwise, your file could end up on another collection agency's desk and they would miss the commission. Certainly, the collector's behaviour showed they were not acting in good faith and you were. They don't have the price of a stamp??? Tell them you'll chip in an extra 50 cents.

Their deadlines are absolutley meaningless as are any of their other assertions.

It wasn't a bad idea to have them include a promise they will update the credit bureau report once you pay. She says they don't have to because it's the Law. However, collection agents don't pay any attention to the Law as it's hardly enforced under Brian Pitkin. If it was included already in the law, she shouldn't have any objection to including it in a letter - if she was acting in good faith.

When they call you back shortly (and they will) remain adamant about getting a written letter before paying But BEFORE you do that negotiate what you will settle for first AND then stipulate they put it in writing.

This is because, you will likely catch them in a lie. If they say they'll accept 30%, but really intend this to be a down payment, you will find out then by surprising them with a demand they put it in a signed agreement. A letter is much more preferable than a fax.

Ray