Consumer Law

Alabama Consumers Sued - The Role of Your Credit Report - Part II

By M. Stan Herring

In our first part in this series we gave you an overview of why as an Alabama consumer you need to pull your credit reports when you have been sued by a junk debt buyer such as Palisades, Unifund, Asset Acceptance, and the like. We pointed out three reasons:

1. You need to know what the junk debt buyer is saying about you and the date of last activity;
2. Is the junk debt buyer reporting the account as being "in dispute"; and
3. If you win your case will the zombie debt buyer remove the account from your credit reports?

This post will address the first of the these areas - what is the debt buyer saying about you and the age of the account.

Sometimes we see when people have been sued in small claims or district court in Jefferson County or Shelby County or wherever the suit may be filed - we see the amount claimed is significantly higher than the amount listed on the credit report. Most debt scavengers who sue Alabama consumers do NOT claim attorney's fees as they know they cannot obtain attorney's fees when they don't have a valid contract. As we have pointed out, debt buyers normally either do NOT own the account or are unwilling to prove they own the account. So the amount they claim in a lawsuit should be similar to what is on the credit report but often it is not. This can cast doubt on the credibility of the claim - particularly when the amount claimed is (as it almost always is) significantly higher than what they are telling the credit reporting agencies.

The other reason knowing what's on the credit report is so important that we will address in this post is the age of the account. The basic rule is that negative accounts can stay on your credit reports for seven years (sometimes it is seven and a half years). This is measured from the date you first become delinquent - that is normally when you stop making payments. What some junk debt buyers have a nasty habit of doing is to list the starting date as the date they bought the account. This is not an accident. This is to hurt Alabama consumers by forcing the account to stay on your credit reports longer than it is supposed to - here is an example. You default in May 2001. It will come off in May 2008. But Palisades buys the debt in February 2006 and reports the trigger date as February 2006. Now it will stay on until February 2013. When you find this, contact a lawyer immediately so you can file suit if that is appropriate. We have previously posted about this dirty trick of debt buyers. We suggest you respond to this type of malicious conduct with a vigorous and punishing suit.

Part Three of this series will focus on whether the debt buyer is listing your account on your credit report as being in "dispute" as required by law assuming that you have disputed the account.

Full post as published by Alabama Consumer Blog on February 24, 2008 (boomark / email).