Can a Creditor Collect After a Debt Has Been Charged Off?
The phrase "charged off" probably means that the creditor has written the debt off for accounting purposes as uncollectible. When a debt is charged off, you still are fully liable for payment (and will be until the statute of limitations in your state runs out), and your creditor might sue you for payment. The answer will depend on the statute of limitations for collecting credit card debt, based on which state's laws govern the agreement.
The Fair Credit Reporting Act regulates the use of information on a consumer's personal and financial condition. The most typical transaction which this Act would cover would be where a person applies for a personal loan or other consumer credit. Consumer credit is credit for personal, family, or household use, and not for business or commercial transactions. Also, this Act can apply when a person applies for a job or even a policy of insurance when certain investigations are made of the applicant. The purpose of the Act is to insure that consumer information obtained and used is done in such a way as to insure its confidentiality, accuracy, relevancy and proper utilization. Under the Act, consumer reports are communications in any form which are provided by which regularly gather and furnish informa¬tion on consumers to potential creditors, insurers or employers.
Upon request, a credit bureau must tell a consumer the names and addresses of persons to whom it has made a credit report on that consumer during the previous six months. It also must tell, when requested, what employers were given such a report during the previous two years.
Some information obtained by credit reporting bureaus is based on statements made by persons, such as neighbors who were interviewed by the bureau's investigator. Needless to say, these statements are not always correct and are sometimes the result of gossip. In any event, such statements may go on the records of the bureau without further verification and may be furnished to a client of the bureau who will regard the statements as accurate. A person has the limited right to request an agency to disclose the nature and substance of the information possessed by the bureau to see if the information is accurate. If the person claims that the information of the bureau is erroneous, the bureau must take steps within a reasonable time to determine the accuracy of the disputed items. If no correction is made, the debtor can write a 100-word statement of clarification which will be included in future credit reports, even it the agency disagrees with clarification.
The Fair Credit Reporting Act (FCRA) requires that a credit reporting agency follow reasonable procedures to assure accuracy of the information it gathers. Adverse information obtained by investigation cannot be given to a client after three months unless it is verified to determine that it is still valid.
Credit reporting bureaus are not permitted to disclose information to persons not having a legitimate use for this information. It is a federal crime to obtain or to furnish a credit report for an improper purpose. Under the FCRA, agencies can only disclose information to the following: 1) a debtor who asks for his own report; 2) a creditor who has the debtor’s signed application for credit; 3) a potential employer; and 4) a court pursuant to a subpoena.
Agencies are also limited as to what can be disclosed. For example, no disclosure may be made of bankruptcies that occurred more than 10 years ago or lawsuits finalized more than 7 years ago. There can be no disclosure of criminal convictions and arrests that have been disposed of more than 7 years ago.