7 year deletion on most debts is really 7 years+180 days!
7 Year Deletion on Most Debts is Really 7 Years + 180 days
Some things are repeated so many times that we assume they must be true. People that care at all about their credit score know that most debts must be deleted after 7 years. Or they think they know that 7 year deletion is the maximum time that negatives can be carried by the credit bureaus. They may even know the major exceptions to this 7 year deletion rule are Chapter 7 Bankruptcies and tax liens. Drunk driving judgments and punitive damages awarded in law suits are some other lesser known exceptions to the 7 year deletion rule.
7 Year Deletion on most debts is really 7 1/2 Years
Most debts have to be deleted 7 years after the first delinquency, right? Not quite. The Act actually mandates that the 7 year period does not start until 180 days after the most recent late payment. Despite this most debts are purged from credit reports after 7 years.
Be Careful about Re-Aging your own Debt
Also remember that if you bring a bill current and default again you will restart the clock all over again. It is illegal for debt collectors to re-age debts by counting the first day on the debt aging clock as the date they receive it. By making a partial payment you re-age it for them.
Another Re-Aging Trick of Debt Collectors
If the debt collector thinks he can re-age the debt by selling it to another debt collector you can challenge this practice and win. I’ve recently seen some over zealous debt collectors who keep adding interest to the debt every month. By doing this they are creating a debt that re-ages forever. Such a debt reporting practice would negate the whole purpose of the deletion requirement for aged debts. There is nothing in the law as it currently stands that specifically prohibits this practice.