collection account

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askaquestion
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Subject: collection account

Wed Apr 01, 2009 7:43 am

what does it mean when a collection account is closed but there is still balance? is there a time frame that I need to pay it off and how will it affect my credit score?

Mary

Joined: 06 Jul 2006
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Posts: 730

17413 Magic Points

Thu Apr 02, 2009 8:54 am

Closed collection account means that the creditor has closed down your credit account and sold off the outstanding debt to the collection agency. This means that the collection agency now owns the debt and you are required to pay it to the CA.
You are liable to pay off the debt to the CA till the Statute of Limitation on the debt has expired. Once the SOL expires neither the CA nor the creditor can recover the debt.
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Justin

Justin

Joined: 17 Jul 2006
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Posts: 1093

25288 Magic Points

Thu Apr 02, 2009 9:00 am

Since the collection account is already listed as delinquent in your credit report, it will stay there for seven years and six months from the date of your last missed payment towards the debt and affect your credit score. All you need to do is to get the debt validated from the CA and negotiate for a PFD agreement so that as soon as you pay off the outstanding amount in full, the negative item will get removed from your score and your score will improve.
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Justin

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