Hi.

In my early 20's I got into some credit card debt(about $10,000) that I could not pay. I was prepared to file bankruptcy, but a friend of mine who worked for a collection agency told me not to bother. She said that regardless of whether I pay the debts off or not, in 7 years these would be erased from my credit report per law. I followed her advice as I was so confused and did not know what to do.

It'll be 7 years from my last payment on all of these debts in about 2 months. I've checked my credit report for free recently and see that while the original accounts haven't been paid in 7 years, these companies then sold my debt to collection agencies, which then sold to different collection agencies and every time a different collection agency acquired my debt, it seems that they posted a new report on my credit with a later date. Some of these have become "charge offs" and show the date as recently as 4 months ago on my report. Will these dates affect the 7 year rule? If a collection agency posted a charge off 4 months ago on my report, will I have to wait another 7 years to clear my credit? I'm so confused and scared. I'm over 30 now, pay all of my bills on time and in most cases 2 months in advance and am looking at purchasing a home as soon as my credit gets cleared up. Am I screwed?

Can someone please help me. Any and all suggestions and advice will be greatly appreciated!

Don't quote me on this but I'm pretty sure that the "7 years" rule is based on the first time the negative was reported. If it's the same account that has simply changed hands then it probably doesn't refresh the clock.

the only way they can reset the debt is if you made some kind of payment to them. If you gave the CA even a dollar they can reset the clock.. So get a hard copy of your report because these sleaze balls tend to claim you made a payment so they can restart the 7 years. And if they have immediatley send them a certified letter demanding they remove it or you will immediatley file suit. ANd really file a law suit. It is 1000 per offense. They call this practice reageing an account and it is highly illegal.

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Great info, CCWO!

I'm not sure where you are getting your info from CCWO, but it's incorrect. I think maybe you are confusing the 7 year reporting period with the statute of limitations, which can sometimes be reset by making a payment.

The Fair Credit Reporting Act states that delinquent accounts may be reported for a maximum of 7 years from the date of first delinquency. Nothing can legally reset the 7 year reporting period, including the debt being sold to another collection agency or a payment being made.

Yes you are right I am wrong. I did mean to say reset the statute of limitation not the 7 years. Sorry about the mix up.

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It's a common mixup that I was guilty of when I first started to learn about credit, so no need to apologize.

So let me see if I got this straight. No matter what happens, a negative account will be reported for a maximum of 7 years, right?

So if the account mutates from 120 days late to collection to charge-off, it can only be reported for 7 years from the initial negative reporting date?

Yes that is right.

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So the statute of limitations part applies to whether or not creditors can file suit only?