Does Unpaid Debt 'Age' In A Way That Makes It Less Harmful To Credit Score?

[ryan]

Somewhere, I was reading something, that seemed to at least imply that as your unpaid debt 'ages' at about the 2 year point, it starts to not pull your score down as much as when the default first started?

If true, and I understand it may not be, would 2+ year old defaulted debt and a FC, look better or worse, than a BK and a FC? ...
Of course, I know ALL variations of these scenarios are bad, but I'm only curious about what might be the 'best of the worse' here?

If this should be posted in 'Credit Recovery' subforum, I apologize, wasn't sure.

[jwmc1]

Not really...what do you have?

[Charlie777]

Once paid, the negative impact of prior derogatories is reduced over time. A paid item keeps its aging or chargeoff status, it just stops being updated - that's why it's preferable to seek a PFD in dealing with them, if you are able to pay.

[ryan]

I probably didn't explain this well - that's why so few answered maybe?

I'm saying, assume you have many defaulted CC's and FC mortgage, but no BK at present. (so the slate has not been cleaned, so to speak)
The defaulted cards are coming up on 2 years. I had read somewhere, that even defaulted debt, as it ages is not as detrimental to credit scores as when it was new/recent? wondered if that made any sense, or if anyone had read/heard anything similar?

[dman]

I think this is the scenario you're asking about:

Person has multiple charged-off accounts, plus a foreclosure. These negatives are nearing two years old. Would a bankruptcy help or hurt this person's credit score?

Answer: I don't know. I will say this...the bankruptcy will NOT erase all the late-payments reported, nor will it erase the foreclosure. Those will stay on the credit report. What will change, is any amounts due will (should) be reported as $0, and of course the bankruptcy itself will show on the report.

In regards to your credit report/score, a bankruptcy is most beneficial if filed BEFORE anything goes late.

[feelingnutsy]

Pardon me---what is a PFD?

[ValleYum]

Pardon me---what is a PFD?

I *think* it is an acronym for Pay For Deletion - where you make an offer to the creditor to pay your balance if they will delete derogatory info from the credit reporting agencies.

[bcohen]

I am also in the same situation, and I also was wondering if doing nothing (assuming I don't get sued) will make my credit rating improve over time. I have numerous charged-off debts, all from 2008-2009, and I have neither the ability nor the desire to ever pay them back. These debts consist of two charged-off credit cards, one charged-off cellphone account, one charged-off overdrawn bank account, and several medical bills. After I got fired from my job in 2009, I decided to "walk away" from all my non-essental bills--basically everything other than rent, utilities, and health insurance--and let them charge off.

I am now going to college, so when I graduate--in 3 to 4 more years--I hope my credit will have improved, even though I have absolutely no money to pay toward any of these debts.

[Floridagail]

My 2 sons took this course, just stopped paying. both got letters etc. Nver got sued, It took 7 yrs and their credit report became clean when it all dropped off. I of course had to dispute some of the reports that were showing up double by bill collectors. That was in 90's. Today I think the cc companies are selling debt and suing more. I was not sued until 18mos by Cap ONe. rest did never sue me. You may get lucky.

[jacko]

Capital One was the only creditor that sued me and won a worthless judgement. The others just looked at my credit report and said for get about it. I see no reason to file BK if your income is in the crapper and have no assets to take. When my financial situation changes, than a BK will be revisited.

[Floridagail]

I agree, but Cap one demanded by the court my financial records ex: pension etc. i filed to avoid that. They did sue my friend also, they never came after her paycheck but 2 yrs later she got laid off and they somehow got her final severance ck for 3000. So it never dies with them.

[HHM]

The main problem with this "idea" is the fact that the debt changes hands over and over again. So you will constantly get new collection and new creditors that re age (although, re aging is controversial) the accounts to make them appear more current than they are.

Playing cat and mouse and "hoping" things go your way is NOT a solution. If you are eligible for BK, if BK would discharge the debt, there is absolutely no reason not to do so. Don't let uneducated fear and myths get in the way of financail recovery.