Department Store Charge Card

I had a department store charge card out of Virginia that I opened up back in 2002. About 2 or 3 years later I was no longer able to pay on the card and it ended up defaulting. The department store sent the account to collections after two missed payments. Since then, I've moved to Missouri and totally forgot about the debt and after about two years in my new place of residence, I started getting letters regarding this debt from a collections company.

My question is what state does the statute of limitations apply to? And, would I be better off paying this $350 debt? Or should I just wait out the rest of the 7 years? Also, if the account gets sold and resold, does the date of activity get reset? Lots of questions.

I am now at the age where buying a home and a new vehicle is in my near future and I'd like to get these smoothed out as much as I can to get my score raised.

Comments for Department Store Charge Card

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May 18, 2010
old debt questions
by: Gerri

Thanks for submitting your debt collection question on our Q&A page.

I may not be able to answer all your questions in this space, but hopefully I can point you in the right direction. According to my sources, the statute of limitations for most consumer debts in Missouri is 10 years, while in Virginia it is five years. Which one applies depends on several factors so I can give you a definitive answer for your particular debt. (And I am not an attorney, so please do not take this information is legal advice, or even as the final word.)

However, assuming you last made payments in 2005, you may be you right on the borderline as far as the Virginia statute of limitations goes.

As to whether you should pay this debt, our view is that if you owe a debt to and you can afford to pay it, you should. However, whether or not you pay it, or whether or not you pay it in full, does not matter either way as far as your credit scores are concerned.

As we explain in our e-book, collection accounts may be reported for seven years and 180 days from the date you first fell behind with the original creditor. The date of last activity, or the date the collection account is picked up by a new agency, has nothing to do with that. So you won't see any improvement to your credit scores simply because you pay this account off.

However, it does sound like you're trying to put this behind you. So it may not be a bad idea to resolve it, either by pain in full, or by settling. Just make sure whichever way you go with that you get something in writing from the collection agency before you pay it statement your payment will settle the debt in full.

I think you'll find it helpful to at lease
read the first chapter of Debt Collection Answers online for free so you have an overview of your rights. You may also want to listen to our
collections and credit reports podcast which goes into this issue in more detail and talks about negotiating to have items removed from your credit in exchange for payment.

Good luck in your efforts to get your credit back on track.

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