Excellent credit today - but multiple charge offs from many credit cards 12 years ago

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mdawg
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Excellent credit today - but multiple charge offs from many credit cards 12 years ago

Postby mdawg » Tue Apr 01, 2014 2:10 am

Let me paint a clear picture....

Twelve years ago I ended up owing over a million in unsecured credit that I never paid. I had had spotless credit all my life and just built it up (Today I'm still a youngster, not very old yet). Twelve years ago, I had some financial problems that resulted in my inability to pay my debt , and then I decided rather than just owing a little I'd just max everything out and have a big party so to speak and get all I could. I mean, why go under for just a little - I took it all.
I never did pay any of it, and very few of the credit card companies went after me in any significant way. Several sued me and only a few were able to even locate me to serve me with the lawsuits, so I ended up with just a few judgments totaling only about $150K. I've always been careful with my assets being in trusts and such so no one has ever collected a dime from me in any lawsuit anyway. I never needed to file bankruptcy.

I'd get into the details of why they could never locate me or why my assets and income were so well protected, but then that isn't what this post is about.

Twelve years later - today - I still have one judgment left on one of my credit bureaus (only on one, the rest show no public record whatsoever), but the rest have dropped off my credit profiles, so my credit score is in the upper 700s again. I am sure it was in the toilet prior to the "seven year rule" resulting in the drop off of all those derogs, but anyway the above is just to add context to my question.


Today, I have many high limit credit cards again. Not adding up to anywhere near a million, but then These are Different Times and anyway, I'm not shooting that high, at least not today. I have very good income and I can afford to pay all my cards, and I don't even keep a balance on any of them, I just pay off at end of the month, if not sooner. My total available credit right now is about 100K.

My intention today is to maintain my good credit indefinitely.

I have re-established credit with a lot of the same creditors I stiffed in the past. At first I figured that they didn't even have any record of my past transgressions, but then it seems that some do have long memories, because recently when I phoned for a credit line increase one of them asked me why my accounts were charged off twelve years ago, and after I gave them the explanation they obviously wanted to hear (was having financial difficulties), that creditor went ahead and jacked up my credit line anyway.

So, my point being, that creditors do forgive and forget.

But not, so far, American Express.

I applied for the same Platinum card I had twelve years ago and was instantly denied on the basis of "in as much as your prior account was cancelled." True, I stiffed AMEX for about two hundred large and never paid them, but then they never bothered to sue me (at least not successfully) anyway, and so I don't owe them anything anymore. The debt is legally extinguished.

MY QUESTION IS: is it a violation of the Fair Credit Reporting Act (FCRA) or any other rule or law that a creditor use something that is over seven years old against you? Obviously negative credit may not appear with a credit bureau seven years after last payment or recording of judgment, which is why my credit is near spotless again, but may creditors use charged off debt against me anyway? It seems that using negative matters that are over seven years old against a creditor is against at least the spirit of the FCRA.

AND, regardless of whether they may or may not, what have others experienced? Has anyone re-established credit with AMEX seven or more years after being cancelled with them?


jahsoul
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Postby jahsoul » Tue Apr 01, 2014 10:09 am

IIRC, the FCRA doesn't protect against something that you legally owe, it just governs the way that it is being reported. A charge off is still a charge off whether it is being reported on your credit or not. So if it hasn't been cancelled by AMEX or paid by you, I believe that you are still on the hook for it.
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haikuginger
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Postby haikuginger » Tue Apr 01, 2014 5:42 pm

jahsoul wrote:IIRC, the FCRA doesn't protect against something that you legally owe, it just governs the way that it is being reported. A charge off is still a charge off whether it is being reported on your credit or not. So if it hasn't been cancelled by AMEX or paid by you, I believe that you are still on the hook for it.


To clarify: The statute of limitations on your debt is probably over, so you're not on the hook for the debt. However, any issuer is free to talk adverse action against you based on their past dealings with you, even if such dealings can no longer be on your credit report.

jahsoul
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Postby jahsoul » Tue Apr 01, 2014 6:02 pm

haikuginger wrote:To clarify: The statute of limitations on your debt is probably over, so you're not on the hook for the debt. However, any issuer is free to talk adverse action against you based on their past dealings with you, even if such dealings can no longer be on your credit report.


The SOL doesn't remove responsibility from paying the debt but sets a limit to when a creditor can take legal action (sue) against you. If the chargeoff is still on the books, the OP probably won't be getting any AMEX love anytime soon.
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otter
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Postby otter » Tue Apr 01, 2014 6:47 pm

mdawg wrote:Let me paint a clear picture....

MY QUESTION IS: is it a violation of the Fair Credit Reporting Act (FCRA) or any other rule or law that a creditor use something that is over seven years old against you? Obviously negative credit may not appear with a credit bureau seven years after last payment or recording of judgment, which is why my credit is near spotless again, but may creditors use charged off debt against me anyway? It seems that using negative matters that are over seven years old against a creditor is against at least the spirit of the FCRA.


Even in the uber-unfriendly business climate of the state of California, it's not against any law for a creditor to deny you credit based on their internal records.They may not be able to win a lawsuit against you because of statute of limitations, they may not be able to share your dead-beatedness (let's call it what it is) with others, but they are in no way obligated to forgive or forget. And did you just say "spirit of the FCRA"? Unbelievable! Can I borrow a quarter mill from you? Oh, I don't plan on paying you back or anything... I'll just lay low for seven years and then I'll come back and borrow another 250k. You know, seven years- forgive and forget, cuz "personal responsibility" is so 20th century!

mdawg wrote:AND, regardless of whether they may or may not, what have others experienced? Has anyone re-established credit with AMEX seven or more years after being cancelled with them?


Your chances of getting approved with Amex with 250k unpaid are almost as good as my chances of coming home from work and finding Kate Upton and Mila Kunis in my bed waiting for me. American Express is known for blacklisting and for much smaller amounts than what you owe them. Perhaps if you paid them back or contacted them and offered to settle for a smaller amount; perhaps then they might approve you a few years down the road, but even that is highly doubtful...

Be happy you've somehow managed to repair some of the bridges you've burnt...
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mdawg
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Trying to move on

Postby mdawg » Tue Apr 01, 2014 8:25 pm

Yes I suppose you all are right and what I suspected. I'll keep you all posted on what transpires with AMEX. It seems to me that eventually they should forget about it. I mean, if the debt is (legally) uncollectable then I don't see that it should be used against me. Or maybe what I am saying is that I want an AMEX card but not bad enough to cough up such an old large debt that isn't affecting me otherwise.

You know, in denying the card AMEX has not proposed my paying off anything anyway.

I know of a young adult friend whose father's AMEX was cancelled because the father disputed a debt of about thirty thousand and refused to pay it. Supposedly the father had a dispute with a merchant and when AMEX sided with the merchant, he refused to pay AMEX. The son was refused an AMEX for a while "in as much as your previous account was cancelled" but then after a while AMEX let the son have his own account. But I suppose in that case since my friend was not the primary cardholder it was a different situation.

Thanks for your thoughts.

jahsoul
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Postby jahsoul » Tue Apr 01, 2014 10:15 pm

$200k is a lot to forget about. While they can't legally pursue collection, you are still legally on the hook for it, unless it is forgiven (but then that $200k would be considered taxable wage) or it is paid, so it looks like a gridlock.
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JMR
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Postby JMR » Tue Apr 01, 2014 10:33 pm

mdawg wrote: It seems to me that eventually they should forget about it. I mean, if the debt is (legally) uncollectable then I don't see that it should be used against me. .


200 grand is a bit for AMEX to forget about, if you are in their personal records now, you more than likely will never get out. Sure, they can't collect or pursue legal action. But, it doesn't mean they will give you a card. You did burn them quite bad.
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Postby MemberSince99 » Wed Apr 02, 2014 6:37 am

Wow 200k? That makes my burning them for a little over 2k look small time. (I would actually pay them back if it would clear the matter away....another story).


I'm surprised they did not sue over that. They never sued me either. In both our cases it's after statute but the difference is I got back in, though they always decline any CLI I request I ask for with "previous delinquencies" as the reason.


I agree with an amount that large you might never get back in (all you can do is keep trying). But honestly, if someone burned you for 200k would you give them more money? I'm guessing no so it's hard to blame them. But that "cancelled" message combined with no hard pull means you are on their blacklist and it will be hard to get off of there, unless you want to pay them back. You don't have an obligation to legally of course at this point (or they can't bring legal action against you I should say) but that may be the only way if you are dead set on having a "real" Amex again.


The alternative is just to get a card that another issuer has that uses the Amex network. Not sure if that is what you are looking for, but with what has gone down, I don't see you getting back in soon.

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Postby thom02099 » Wed Apr 02, 2014 8:55 am

As the others have stated very well, with that kind of debt, it's not likely you'll ever get back in with AMEX unless the debt is resolved. Anecdotally, AMEX has a very long memory and they do blacklist, based on their internal files; it can be hard to get off that blacklist. And AMEX is ever watchful with current accounts. Even those of us with current spotless credit reports and multiple AMEX cards, are watched; some of us frequently, some of us not so frequent. I guess it depends on the card and one's personal history with AMEX. They WILL and DO soft pull cardholders on a regular basis.

Member's suggestion to get a card from another issuer that uses the AMEX network is a good one, if you're really included to have that AMEX name on a card. Otherwise, just look to other cards that might meet your needs.
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