My husband’s car was repossessed six years ago. It has since passed the SOL and it will fall off his credit report in one year. Mistakenly he may have reset the SOL by talking to the collection agency and acknowledging the debt. Maryland law is a little confusing in regards to resetting SOL. When his car was repossessed he owed the original creditor about $7000 the balance has now gone up to $39000. We REFUSE to pay that amount on a repossession. They were willing to settle for $13000 which still seems like a lot for a old debt. My questions are, Did he rest the SOL by acknowledged debt, we have not sent off any payment or put anything in writing all communication has been over the phone? Since this is the only thing on his credit should he settle in order to buy a house now? Or should we play the waiting game and wait a year for it to fall off his credit report before buying a house? The main motivation in buying a house now is that the market is good for buyers and we have the money now to buy a house. Any answers would be helpful.
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The SOL may be reset by making a payment and/or acknowledging that you owe the debt in writing.
You might want to check with your mortgage lender. Almost all will want you to pay back all defaults your credit report. Maybe it’s best to wait one year until it falls off your credit report. If you can’t wait, then do this:
Mail a vaguely worded statement like:
I am willing to settle this matter for 25% of the original amount. This is in no way an admission of this debt, but rather an attempt to settle this matter. Your firm must send me a written agreement on your company’s letterhead that you will accept this amount as “payment in full” and that this issue will be settled. Upon receipt of this agreement, I will mail you a money order for this amount.
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- Contacting debt collectors out of the blue for old debts may stir up more trouble than it’s worth. Your effort to pay off old debt could be met with threatening, abusive collection calls…threats of lawsuits…and once they find out that you are willing to pay they will probably add on all sorts of fees and they’ll come after you for two or even three times the original amount of debt.
Yes, if this matter is important to you you should concentrate on the things you need to repair in order to get in the house of your dreams. This shows future lenders that you took the initative to pay yoru debt and when you get your home, pay your mortgage on time. This opens up the possibilities of getting future loans should you need to borrow in the future.
Can’t answer about the resetting of the debt, but the housing market may be the same or more favorable for buyers in one year than it is now. There are a lot of foreclosures to wade through, and there are a lot more coming. Unemployment has not peaked yet.
SOL will most likely be reset. Get preapproved for a loan before you pay it. The bank or mortgage company will either tell you to pay it or they ask for you side of the story.
I had something similar, I owed on a old credit card (3yrs old) and had disputed the charges, lost the dispute so I just refused to pay the credit card. When I went to buy a house they told me to just pay it. But on another credit card that was 7 years old they said don’t pay and asked me for a letter in writing of why I didn’t pay it. and it was never brought up again. Good luck
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