Sorry for frustrating you with this Ray. Your information has been invaluable and I will not take up any more of your time. I guess its time to dive in and have a peek fior myself to see what they will accept. Thank you for all responses thus far and all the best in '08. Thank you for taking the time to hear my story.

I don't want to beat this to death much longer. If you would order the long free format versions of your credit files from the 2 bureaus, at least the Equifax one has a summation info page called "Retention Period of Data"

The page explains how long they keep stuff for. The oustanding balance on the Citibank Home Depot account last Jan.18, 2007 was such and such an amount as at that date. That doesn't mean it's going to stay on there for 6 more years after that date. It refers to the date of last activity.

As I've said 'til I'm blue in the face, SELDOM does what's on a credit report from either one of the 2 bureaus match what the correct information actually is once your file gets delinquent items. You've got to get them to fix it. In practice, this can be a very time consuming, aggravating, but nonetheless a very WORTHWHILE excercise. If there are several items with incorrect information, you might have to deal with each bureau in several stages before all is set right. Again, keeping all your past receipts and account statements is invaluable in accomplishing this task.

PMS has a standard policy of asking for 85% of the amount outstanding with accumulated interest grandfathered at the rate that accompanied the account. Or 100% of the charge off amount, that is to say, what the accumulated amount was including accrued interest when they bought it from the original creditor. They give you this schtick even if the debt is stats barred and they have no legal recovery remedy other than sticking hard inquiries on your credit file every year to pressure you into settling.

The debt they buy up is always part of a large portfolio. Sometimes the rates are published in collectionsworld.com. Whatever; they certainly didn't pay more than a fraction of a penny on the dollar for a portfolio several years old. Some of this debt will be stats barred depending on where and when the debt holder took out the account. From there on they work the numbers. You've got to realize that if the original creditor had a good reason for not suing you, PMS likely won't either. It's more expeditious and profitable to have oily chamelion - like collectors work the numbers on the phone and generate return on investment that way.

If PMS paid say 10 bucks for your account, if they got even a $100 for it, they would still be making a handsome profit on their investment. So why should you pay $3400 PMS, retorts. Yes, we only paid 10 bucks for your account, but statistically, the expection rate of recovery on any given account may only be one in twenty. That is if we buy 20 accounts, we may only realize a recovery on one of them. That's why the price was so low to begin with. You retort that, yeah, PMS may only get back a return on one in twenty accounts but why should I have to bear the burden of what the other 19 guys do. I didn't borrow their money; they did, and so I'm not responsible for their debts going bad. After all, this isn't like insurance where the spread of risk is accomplished by charging premiums to many to cover the losses of a few. Howver, with respect to insurance, it differentiates between pure risk and speculative risk. Insurance only deals with pure risk where purchasers want to protect themselves against fortuitous (accidental) events. Thus there is no possibility of a profit.The indemnity principle, integral to all insurance, implies that an insured is not allowed to profit from a misfortune.

However, when a debt buyer purchases a portfolio of debt, they are operting on speculative risk. They are doing so to make a profit and not to avoid unfortunate events Speculative risk in debt buying is a form of gambling utilizing the large of large numbers. The purchase of a large portfolio allows fairly reliable predictions of what investment returns will ensue.

Is there a correlation? Well, in insurance, we expect to pay a premium to cover losses which most likely other people will be responsible for. No one expects to get their car insurance premiums back because they didn't get into an accident last year. As stated, this is pure risk undertaken for self protection and not any possibility of a profit.

Conversely, when a debt buyer purchases a debt, they buy an asset that's a speculative risk. The value is determined by the amont of the debt times the probability of recovery, So a $10,000 debt that has a 5% chance of recovery has a value of no more than $500. Each individual debt carries a certain risk which largely determines its market value. That risk is detemined by what the response will be of a large number of debtors. If 95 out of 100 choose not to make a payment, is the one who does responsible for the failures of the other 19? Should the one who responds be held accountable for the 19 who didn't? Using this criterion, a debtor might feel they should only offer PMS 5% instead of 85%.

Another view is that when a creditor sells an debt, all the rights attached to and interest in the asset or receivable are transferred to the buyer. Clearly those interests include the right to 100% of the original amount owing. Though the market value of the asset might be low, it's because the chance of realizing those rights by recovering any money on any one account is low. However, that still doesn't negate the fact that a full right to 100% of the money existed at the time of a debt's sale and was transferred to the buyer. Seen from this point of view, the scuzzy debt buyer has a right to 100% of the money.

Ray

Clear as mud...lol

Our credit reporting, collections, and scoring methods need a serious revamp.

Here is the item as it appears on the report:
CBV COLL SVCS.

Original Creditor: CITIBANK HOME DEPOT
Opened: 07/2006

Condition:

Account #:

Balance: 01/18/2007

Responsibility: Individual account

High Balance: $4293

Balance: $4952

------------------------------------------------

That means I have until 2012 for to drop off I guess....ughhhh

Addendum: The previous statement on credit reporting periods by the 2 bureaus needs qualification. Unfortunately, the published credit reporting policies by the 2 bureaus is vague in certain areas. TransUnion is the worser of the two in this regard. They define the limitation period for the reporting of negative items as being 6 years from the date of last "activity" which of course is in compliance with consumer reporting legislation. And if you look at their credit reports, you will see a column header "Last Activity" for accounts under the "Trade" section of their credit files. But does last activity really refer to?

In principle, this refers to the date, when the last payment on the account was made. In practice, creditors may use the date when it was "written off" or "charged off" which may be 6 months later. "Charged off" isn't quite the same as "written off" because when the creditor writes off the account they claim it as a tax deduction under "bad debt expense." If they feel that the statistical expectation value of recovery from the debtor is quite low, it may be more economically advantageous for the creditor to get the tax saving up front rather than retaining it. After all, they can't show it as an asset on the balance sheet anymore.

In any event, there can be an ambiguity insofar as what date is reported. Perhaps after an account has gone bad, the debtor may start making some partial payments and that date may be the one reported on the credit file as the date of "last activity".

Further complicating matters is the fact that, after a debt goes bad, the creditor will either sell it or sequentially assign it to a number of collection agencies. On the TransUnion credit file, for example, there is a section called "Collections" which reports on the items that have been sold or assigned. Many of these items, especially the ones that have been sold, will show "reporting dates" of when they were bought up. In that case, they will stay on your file for 6 years after that date (which may be years after when it went into default with the original creditor). The name of the LAST credit holder will be listed along with the debt buyer but that is all.

But this minimal disclosure may not help because the last debt owner may not even have been the origial account holder. Say ARO buys up a debt from HBC Credit; the credit file will report "ARO Group Inc. as the credit owner and "ARO Collections" as the collection agency. Sure, any creditor looking at your file will know that ARO Inc. is not the original creditor and that it was bought up - but that is not the point. The point is that there is no direct link as to what the original account was and when it was first defaulted on. Instead, unless the item is disputed with respect to the dates involved, it will stay on your credit file for a lot longer than necessary because the starting date that is used will be when the debt buyer bought up the account. That's why the credit bureaus always tell people:

"Save your damn receipts and account statements!!!!" Without them, it's very difficult to dispute anything. You think a collection agency is going to do you any favours???

With respect to "hard inquiries, consumer law reporting rules are a little different. It really is too bad that Equifax displays them for 3 years and TransUnion for 6 years. Because of this, collection agencies can use this as a tool to blackmail you by circumventing the 6 year limitation reporting period on negative information. Suppose your file is delinquent for 5 years; a hard inquiry by a collection agency will still stay on there for another 6 years. People need to lobby their MPP'S; however, if you tell them you are in collections, they may not show you a whole lot of respect and only give you a perfunctory response. Come to think of it, they probably will do that no matter who you are.

Ray

Well, I will be paying this debt irregardless as I have a moral obligation to take care what I started. I would just like to pay the original creditor and not some collection agency. I think my last payment was approximately 2 1/2 years ago.

My g/f seems to believe that a paid collection will affect your credit report in a better way than an outstanding balance collection account. Is that so ?

I'd like to "wait it out", but the knowledge of having a $4000 debt in the background kind of eats away at ya...

Thanks again for all advice provided so far and for the timely responses.

I also tried to buy the Equifax instant online $15 report and they will not let me view it online as I had placed a fraud watch on my account when my wallet was stolen. At least I know the program works !
Now I must send documentation to them via mail or fax before they will give me access.

I wonder why my credit union account will not show at Transunion report but it will show with Equifax... odd...

You can't reset the debt limitation period by verbally acknowledging it. You need to make a payment or to make written acknowledgment of it.

It's possible to rebuild your credit score even if there's one R9 on there. As a delinquent item ages, it contributes less and less to the credit score than one that's new (less than 24 months old or so) If you settle the item, you will probably reset the credit report limitation period and it will show for another 6 years on your TransUnion file and for 3 more years on your Equifax.

I said before, asking for copies of the original contract is usually a complete waste of time. But you can always ask if you want.

Ray

Is it still possible to get "good credit" even though there is a Charge-off on your report ?

If so, then I will just settle and offset the bad mark with many good ones as that is the only negative remark on my report.

That is also the only outstanding payment owing to anyone.
The other thing is that I would like to know is that if I acknowledge the debt verbally (since the call could be recorded) does that automatically reset the SOL ?

I want to know because if they do not accept my initial offer I am willing to wait them out as long as it takes providing it is not something crazy like over a year or two.

They should also be able to prove what authority they have to collect from me and the date of my last payment as I understand it ?

If you settle the PMS debt, it will stay on at least your TransUnion file for the next 6 years from the date of last activity and it definitely won't improve your credit score. Equifax keeps settlements listed for 3 years but TransUnion has them on there for 6 years. You have to consider the bureau who reports them longer as both bureaus are regularly utilized by most creditors.

I have no idea what they will accept. It depends on what they think they can get from you. Certainly, if you phone the collection agencies up at 200 Queens Ave. Suite 700 in London, Ontario at 1-866 903-2009, they will, like all collectors and debt buyers, scream that they couldn't possibly take less than 85%. Days and days of negotiation might give the unwary debtor the conviction that 50% is the bottom of the barrel amount they will ever to concede to. The same tired old schtick from the bottom of the barrel crowd. What really happens is that very rich people buy up this bad debt (a lot of it stats barred) and have their chronies work the phones to get them huge returns so that they can have more millions. That way, the rich get richer and the poor get poorer.

When the debt becomes stats barred, you don't have to legally pay them anything, and so, of course, your bargaining position becomes immeasureably improved. But you have to find out EXACTLY when it will become stats barred by finding the date of the last payment or written acknowledgement of the account and then add 6 years. (That's why people need to keep their old receipts.) Too bad you don't live in Ontario or Alberta where the SOL is only 2 years. I said "immeasureably", because you still morally owe something on the debt and should try and settle it if and when you are reasonably able to. But when it's stats barred, PMS won't have any legal remedy or threat against you and so you are arguing from an entirely different position.

Then, they really may have to take 5% or 10% with no interest accumulation. If they don't well, that's up to them and they can call you back - if they want. I say this because don't be surprised if the collection agencies WILL still expect 85% to 100% of the amount with interest even after it's stats barred and expect that you will be stupid enough to listen to them.

Asking for copies of original contracts is a complete and total waste of time in my opinion.

Ray

Thanks again Ray, your information makes me feel a lot better than what it could be. I am willing to make a settlement outright, but what do I offer them if they paid that little on the original debt ?

Do I just phone them directly and say "Hi, I am making an inquiry regarding account # XXXXXXX and I was hoping to come to an agreement that may be beneficial for us both. My credit rating is at the lowest possible and I realize the age of this debt so I am willing to offer X amount which I feel is a fair offer."

Or do I phone them outright and indicate I was phoned about a debt I have no recollection of and I request debt validation in the form of the original contract and payment history ?

I can feel this coming to an end soon and i'd rather have the settlement on my credit rating for 3 years than let the SOL expire.

I could potentially show my credit rating to one of the advisors here if that would be beneficial and prudent.

Thanks again for this site and the help you provide with your own time. You really have helped a tremendous amount.

Kevin

Home Depot, after the bad debt finished its 3 to 6 month assignment period with CBV (who were not able to close it out), probably decided to sell it outright to Portfolio Management Solutions [PMS] for one or two cents on the dollar. They're located down the street from where I lived when I went to school at Western in London. PMS may only have paid 20 to 40 bucks for the original $3500 amount outstanding. Or even less. If they get 50 bucks out of you, they'll likely have made a good profit.

Anyhow, the thing goes SOL by 2010. PMS is not big on making a lot of harassing calls or lawsuits compared to others. They'll send you the odd letter that will have a number on top which represents the number of attempts they have made to colllect from you. Again, it depends on how they've sized up your assets and income. If you don't settle with them soon, pull your TransUnion Credit file every 6 months and watch the inquiries they've made to keep tabs on what a future collection prospect you might be. Bottom line; out of sight is not out of mind.

Ray