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  1. #1
    Join Date
    Dec 2018
    Posts
    1

    Default Can I Get Out of the Consequences of Bad Credit by Doing Nothing

    My question involves collection proceedings in the State of: Oregon

    Since 2003, when Social Security declared me permanently disabled, I have been unable to afford health insurance to supplement my basic Medicare coverage (in spite of the useless ACA). Nor can I even pay the onerous co-payments I incur as I am passed around from one medical "specialist" to another. Consequently, I have virtually papered my home office walls with unpaid medical bills. I tried making partial payments until I discovered that seemingly honorable approach just keeps restarting the statute of limitation dates. All in all, it seems that just waiting out the statute dates is the only way I will ever be released from Bad Debt Jail.

    In this regard, could someone please confirm (or correct) what seems to be the statutes applicable in Oregon to any unsecured debt.

    1. Creditors and/or their collection agencies can attempt to collect unpaid bills literally forever as long as they do not violate the U.S. Fair Credit Collection Act because there is no statute of limitations on collection per se. A debt is a debt until it is no longer a debt.
    2. They cannot sue in court after the SOL for legal action on unsecured debt, which is 6 years in Oregon. They can only send me demands for payment but cannot go to court for enforceable judgments.
    3. The credit bureaus must remove reported debts from a person's file after 7 years under the U.S. Fair Credit Reporting
    Act, thereby upgrading credit scores.

    The countdown for 2. and 3. starts when the first delinquency occurs, which date I suppose is subject to argument. Any activity such as debt consolidation or partial payments restarts the clock to the date of that activity.

    Is all this legally correct ?

    P.S. I am using the expression Bad Debt/Credit Jail as a euphemism only!

  2. #2
    Join Date
    Oct 2006
    Posts
    15,201

    Default Re: Can I Get Out of Bad Credit Jail by Doing Nothing

    Quote Quoting UDEE
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    Is all this legally correct ?
    Yes, but I will also add that you are considered uncollectable as your only income is either SSI or SSDI and neither can be garnished for medical or consumer debt.

  3. #3
    Join Date
    Mar 2013
    Posts
    16,763

    Default Re: Can I Get Out of Bad Credit Jail by Doing Nothing

    Quote Quoting UDEE
    View Post

    1. Creditors and/or their collection agencies can attempt to collect unpaid bills literally forever as long as they do not violate the U.S. Fair Credit Collection Act because there is no statute of limitations on collection per se. A debt is a debt until it is no longer a debt.
    That is correct. Many collection agencies will give up after the SOL expires but there are many bottom feeders who buy old debts for pennies on the dollar and continue to dun people for the money.

    Familiarize yourself with the actual text of the Fair Debt Collection Practices Act so you know what they can and cannot do along with your remedies for wrongdoing.

    https://www.ftc.gov/enforcement/rule...tices-act-text

    Oregon has its own set of collection practices statutes.

    Quote Quoting UDEE
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    2. They cannot sue in court after the SOL for legal action on unsecured debt, which is 6 years in Oregon. They can only send me demands for payment but cannot go to court for enforceable judgments.
    A common misconception. They can, indeed, file a lawsuit and the burden is on you to raise the statute of limitations as an affirmative defense which means you have to address the lawsuit by filing an answer stating that the SOL has run out and ask that the case be dismissed. The plaintiff, in turn, would have the opportunity of rebutting your defense if a rebuttal was available. Collection agencies seldom spend money on lawsuits if the SOL is clear. While the chance of a lawsuit outside the SOL is slim, it has been known to happen.

    Quote Quoting UDEE
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    3. The credit bureaus must remove reported debts from a person's file after 7 years under the U.S. Fair Credit Reporting
    Act, thereby upgrading credit scores.
    Read the text of the actual statute and you'll find that the period can be as much as 7 years and 180 days.

    https://www.ecfr.gov/cgi-bin/text-id...CIsubchapF.tpl

    Quote Quoting UDEE
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    The countdown for 2. and 3. starts when the first delinquency occurs, which date I suppose is subject to argument.
    Yes, it could be subject to argument. Generally the SOL starts to run when your payment becomes past due which could be a month or two after the billing date, maybe longer with Medicare because the provider will first bill Medicare and bill you for the balance. This process could take several months before the billing department sends final notices.

    Quote Quoting UDEE
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    Any activity such as debt consolidation or partial payments restarts the clock to the date of that activity.
    The SOL period can be restarted either by making a written acknowledgment or promise (12.230) or making a payment 12.240).

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