Old collections transferred bigger amount!

Question

My husband had an old sears card back in 1998 that should dropped off in june. I checked his credit report and i noticed the report says transferred and now double the amount? how can that happen after 7 years. I checked his other report and says charged off? NOw it looks like the debt starts all over again? This is the only item showing negative on his credit. The rest of items are disputed.

Answer 1

Could be that the amount has been charged off and one credit company had just not been notified yet or it could be that Sears has not charged it off and now the amount has gone up for collation costs, attorney fees etc.

Answer 2

7 years is the statute of limitations for bad debt.  Once an account goes delinquent--whether or not it is still with the original creditor--that is what starts the clock ticking.  After 7 years all evidence of that debt disappears from the credit report.  I disagree with the above poster about not ignoring a court summons because you won't get one.  No company is going to bother to sue you for a debt that is over 7 years old because it isn't legal from them to do so.  What your husband needs to do is contact the Credit Reporting Agencies (Experian, Equifax,and Transunion) with a copy of his credit report and make it clear to them that the debt is over 7 years old and thus needs to be removed immediately.  They'll do it.

Sometimes when debts are transferred from one collection agency to another the new collection agency will add a tradeline to your report. They are allowed to do this until the 7 year period is over.  His report should auotmatically update itself, but no system is perfect.

However, if you pay this collection agency and then go delinquent again you may start the SOL over.  Your best bet is to contact the CRA's, have it removed, and forget about it.  Remember the 7 year period begins at the date of first delinquncy, not when he first recieved the card.  Hope this helps.

Answer 3

"Charged off" does not mean forgiven or forgotten, it means it has gone to collections instead of current accounts.  Sounds like it may have been sold to a collection agency (unless it was Sears selling their credit card division).

You would be wise not to ignore any court summons.  Because if he does not answer or appear, they could get a default judgment.  If statute of limitations applies, it is only a defense if brought up before a court judgment is issued.