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Dr. Don Taylor, CFA, Bankrate.com advice columnistCharge-off won't stop bill collector

Dear Dr. Don,
I've managed to get one of the three credit agencies to delete an old charged-off account from my credit file. But I'm still receiving letters from a debt collector (which bought the debt from the original creditor) asking for payment. May I use my credit report, which states that the account in conflict has been deleted, as proof that I do not owe the collection agency and that it needs to stop contacting me?
-- Troubled Thomas

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Dear Thomas,
Getting the collection agency to stop contacting you is a simple matter. Under the provisions of the Fair Debt Collection Practices Act, all you have to do is notify them in writing not to contact you and they have to stop.

Here's how the FTC Facts for Consumers guide, "Fair Debt Collection," explains it:



How to stop a debt collector from contacting you:

A charged-off account is an accounting term that the lender uses to reflect that his prospects of getting repaid are slim. It doesn't mean that you no longer owe them the debt.

In general, a negative item on your credit report stays on that report for seven years. Credit bureaus wouldn't typically remove a charge-off from your credit report until seven years from the date of the initial negative listing of the late or missed payment that preceded the charge-off, unless requested to do so by the lender or as part of a dispute process initiated by you. If you won a dispute with a credit bureau, the bureau is obligated to pass along that result to the other credit bureaus, which should also remove the disputed item.

It's possible that you no longer owe any money for the debt, based on the statute of limitations on the loan agreement. The statute of limitations varies by state and by type of loan agreement. A Bankrate feature, "State statutes of limitation for old debts," discusses these limits, along with how a debt collector that threatens to sue once the debt is past its statute of limitations period, is violating the Fair Debt Collection Practices Act.

I don't think the collection agency is going to stop doing its job just because you show them that the charged-off account is no longer on one of your credit reports. That said, you can get them to stop bothering you and you can figure out whether they are violating the Fair Debt Collection Practices Act. You can sue for damages if they are violating the act.

To ask a question of Dr. Don, go to the "Ask the Experts" page, and select one of these topics: "financing a home," "saving & investing" or "money."

Bankrate.com's corrections policy -- Posted: Sept. 8, 2006
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