“Old Debt May Not Just Fade Away”

“Old Debt May Not Just Fade Away”



Hi Joe, I appreciate the credit report that you sent me. I reviewed the items that you marked that need to be settled. One of the collection items is for an old obligation that must be 10 years old. I thought these items can only stay on my credit report for 7 years?


I let this client know it isn’t that simple, as the 7 year meter starts all over again each time the original creditor sells the obligation. I have also seen where some collection companies resell the obligations again and again. One good thing is that each time it is sold, the better chances to settle the obligation at a lower dollar amount.


The main reason these obligations should be settled sooner rather than later is that they almost always report to the credit bureaus on a monthly basis and each time that it is reported, the lower your credit scores can get.


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Joe Petrowsky, NMLS #6869

Right Trac Financial Group, Inc. NMLS #2709

110 Main St.

Manchester, Ct. 06042

Office: 860 647-7701 x116

Fax: 860 647-8940

Cell: 860 836-9294

Email: joe@righttracfg.com



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Joe Petrowsky does not guarantee nor is in any way responsible for the accuracy of the information provided herein, and provides said information without warranties of any kind, either expressed or implied.

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Comment balloon 52 commentsJoe Petrowsky • June 21 2016 06:30AM


This is a good story to share, Many families need to work on those old obligations that impact their credit scores.

Posted by Roy Kelley, Roy and Dolores Kelley Photographs (Realty Group Referrals) about 2 years ago

Interesting.  I didn't realize that it would keep getting renewed.

Posted by Debbie Gartner, The Flooring Girl & Blog Stylist -Dynamo Marketers (The Flooring Girl) about 2 years ago

Joe, how people forget or do not have any idea and it is so important to take care of your debt!

Posted by Ginny Gorman, Homes for Sale in North Kingstown RI and beyond (RI Real Estate Services ~ 401-529-7849~ RI Waterfront Real Estate) about 2 years ago

wow - good to know that is the case. I had no idea either - 

Posted by Lise Howe, Assoc. Broker and Attorney Licensed in DC, MD, VA, (Keller Williams Capital Properties) about 2 years ago

Thanks Joe.  This is great information to be aware of.

Posted by Gabe Sanders, Stuart Florida Real Estate (Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales) about 2 years ago

I did not know this ! But this is why I'm on AR everyday !!!!!!!!!!!!!!!!!

Posted by Michael J. Perry, Lancaster, PA Relo Specialist (KW Elite ) about 2 years ago

Good morning Joe Petrowsky,

Wow..who knew. You never know the impact not paying a debt owed can have..lesson learned I'm sure by many..pay your obligations!!

Posted by Dorie Dillard CRS GRI ABR, Serving Buyers & Sellers in NW Austin Real Estate (Coldwell Banker United Realtors® ~ 512.346.1799) about 2 years ago

Good morning Joe Petrowsky I thought all bad debt fell off after 10 years.... 

Posted by Barbara Todaro, "Franklin MA Homes" (RE/MAX Executive Realty ) about 2 years ago

Joe, interesting and valuable information! See how much we know? 

Posted by Andrea Swiedler, Realtor, Southern Litchfield County CT (Berkshire Hathaway HomeServices New England Properties) about 2 years ago

Good morning again Joe. Some things seem to go on forever I guess. Have a great day.

Posted by Sheila Anderson, The Real Estate Whisperer Who Listens 732-715-1133 (Referral Group Incorporated) about 2 years ago

Good morning Joe. Some people want their debt repaid! What a thought! Enjoy your day!

Posted by Wayne Martin, Real Estate Broker - Retired (Wayne M Martin) about 2 years ago

This is great advise Joe. I also have clients with old debt that they thought should no longer be on their credit report. They need to be paid or settled to truly go away.

Posted by Mark Robinson, Honesty, Integrity, Service (Geneva Financial, LLC) about 2 years ago

Good Morning Joe -  I didn't realize that a problem like this could re surface.  You really have a wealth of information for everyone.

Posted by Grant Schneider, Your Coach Helping You Create Successful Outcomes (Performance Development Strategies) about 2 years ago

Better to pay off than wait/hope it falls off ...

Posted by Sally K. & David L. Hanson, WI Realtors - Luxury - Divorce (EXP Realty 414-525-0563) about 2 years ago

Selling bad debt is now business that is viable. Just pay your debts and move on with life. Hope is not a plan.

Posted by Harry F. D'Elia, Investor , Mentor, GRI, Radio, CIPS, REOs, ABR (Real Estate and Beyond, LLC) about 2 years ago

I have not had any issues except one early in my career who had an unpaid credit card membership. He refused to pay it went into collection. It was like $50+late fees. It costed me my commission since he was denied a loan. He told me his is close to 800 now. I learned to get preapproval letter before showing any properties.

Posted by Sam Shueh, mba, cdpe, reopro, pe ( (408) 425-1601) about 2 years ago

Good information, Joe.  Most people assume that it goes away after 7 years.

Posted by Fred Griffin, Licensed Florida Real Estate Broker (Fred Griffin Real Estate) about 2 years ago

you know Joe Petrowsky This happens all the time, but it is illegal. The clock doesn't start over when they sell the rights to the debt. these people need to talk to a lawyer that specializes in CREDIT.

Bill Roberts

Posted by Bill Roberts, "Baby Boomer" Retirement Planner (Brooks and Dunphy Real Estate) about 2 years ago

The old Jewish law that debt has to be forgiven after several years holds. To burden someone with a life mark or a "no hope" scenario is life at its worse

Posted by Richie Alan Naggar, agent & author (people first...then business Ran Right Realty ) about 2 years ago

Old debt is when I co-signed a student loan for my son, never again, he still can't pay that thing off!

Posted by Raul Rodriguez, Looking out for the client's interest and not my p (Covenant Partners Realty) about 2 years ago

Thanks for your post, Joe Petrowsky. I had some old debts on my credit report when I bought my last home. My low credit score cost me dearly. I am ready to buy again but only after I have improved my credit scores. 

Posted by John Mosier, Prescott's Patriot Agent 928 533-8142 (Realty ONE Group Mountain Desert) about 2 years ago

Joe, the person's comment is more proof of how much bad information is out there.  I did not realize the continued reporting when debts are sold.  Thankfully ... "bad" credit has not ever been an issue for me.  

Posted by Kathleen Daniels, San Jose Homes for Sale-Probate & Trust Specialist (KD Realty - 408.972.1822) about 2 years ago

Did not know that either. Luckily, my lenders tell my clients, those who need a loan, what they need to do to become "lendable" again. I think most people have been straightening out their act lately.

Posted by Hella M. Rothwell, Broker/Realtor®, Rothwell Realty Inc. CA#01968433 Carmel-by-the-Sea about 2 years ago

Joe what great information, let's face it if you owed something, it should be your responsibility to take care of the obligation, but what do I know, Endre

Posted by Endre Barath, Jr., Realtor - Los Angeles Home Sales 310.486.1002 (Berkshire Hathaway HomeServices) about 2 years ago


I think that my friend Endre Barath, Jr. said what I would have said more eloquently...Happy Sunday to you and Gail Petrowsky .  A

Posted by Ron and Alexandra Seigel, Luxury Real Estate Branding, Marketing & Strategy (Napa Consultants) about 2 years ago

This happens a lot with people who have debt discharged in bankruptcy too. Somehow the debtors sell the bad debt over and over and debtors continue to hound, and some of that practice, btw, is against the law.

Posted by Elizabeth Weintraub Sacramento Real Estate Agent, Top 1% of Lyon Agents, Put 40 years of experience to work for you (Lyon Real Estate) about 2 years ago

Thanks for sharing!!!

The main reason these obligations should be settled sooner rather than later is that they almost always report to the credit bureaus on a monthly basis and each time that it is reported, the lower your credit scores can get.

Posted by Sham Reddy, CRS (H E R Realty, Dayton, OH) about 2 years ago

Hi Joe -- I thought that certain debt was removed after a period of time as well --- you continue to teach us and others about the "truth in lending".   

Posted by Michael Jacobs, Los Angeles Pasadena Area Real Estate 818.516.4393 (Coldwell Banker Residential Brokerage) about 2 years ago

I thought there was a law where if they kept reselling the debt you had the right to dispute it? It's like they keep re-upping the debt but that can't legally collect it (at least in IL).

Posted by Lyn Sims, Schaumburg IL Real Estate (RE/MAX Suburban) about 2 years ago

I learned something new, Joe. I didn't know the seven years renewed once the debt was sold. And I didn't know it could be sold over and over again. 

Posted by Debbie Laity, Your Real Estate Resource for Delta County, CO (Cedaredge Land Company) about 2 years ago

I've heard that when collection rights get sold, usually all the buyer receives is a spreadsheet with name, number, amount, etc. I've also heard that any credit report item can be challenged--and that if the debt servicer can't produce supporting documentation, the item has to be removed. Is this true?

Posted by Ted Seastrom (Bennion Deville Homes) about 2 years ago

Interesting Joe, people have to do something about old debt, medical bills are scary to me, do not ever go without insurance.

Posted by Noah Seidenberg, Chicagoland and Suburbs (800) 858-7917 (Coldwell Banker) about 2 years ago

Thank you for sharing your thoughts. Just pay what you agreed upon. Although just went though a deal that the company did not do what they said they would do and had to pay them anyways. Sad but true .... So why pay them ???? Because they will ding your credit .... Ugly for sure. 

Posted by Laura Filip, What can we do for you today? (Laura Filip Broker , Opening doors for All Seasons of Life ) about 2 years ago

Good evening Joe Petrowsky , Very nice blog! Congratulations on your Feature! I agree, that most people aren't aware of those procedures.

Posted by Larry Johnston, Broker,Friends & Neighbors Real Estate, Elkhart,IN (Broker, Friends & Neighbors Real Estate and Elkhart County Subdivisions, LLC) about 2 years ago

Collection agencies have nothing to lose as they got the bulk of their reports for nothing and just need to monitor a persons credit report to determine when some activity is being sought and then strike for a payment

Posted by Ed Silva, Central CT Real Estate Broker Serving all equally (RE/MAX Professionals, CT 203-206-0754 ) about 2 years ago

I was under the impression that you could not have multiple reports on the same debt.

Posted by Evelyn Johnston, The People You Know, Like and Trust! (Friends & Neighbors Real Estate) about 2 years ago

Joe, people should pay their obligations, and stop trying to wiggle out of them.  I wonder how they would like it if they were on the other end.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) about 2 years ago


Thanks for sharing your insight on old dedt . . . .  Your post is a real eye opener.

Good luck and success.

Lou Ludiwg

Posted by Lou Ludwig, Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC (Ludwig & Associates) about 2 years ago


Congratulations on earning a feature for a very informative post.
Good luck and success.

Lou Ludwig

Posted by Lou Ludwig, Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC (Ludwig & Associates) about 2 years ago

Joe, seems like I am not the only one who who didn't know this about old debts.Thank goodness I do not have any.

Posted by Rebecca Gaujot, Realtor®, Lewisburg WV, the go to agent for all real estate (Vision Quest Realty, Martha Hilton, Broker) about 2 years ago

Yes, some people are surprised once they see an unpaid account on their report from more than one source.  Great information to share.

Posted by Melissa Jackson, Helping You Make The Right Move (Citiwide Alliance Realty) about 2 years ago

Joe Petrowsky - I used to think the same - and now I know....

Wish there was a remedy to this.

Posted by Praful Thakkar, Andover, MA: Andover Luxury Homes For Sale (LAER Realty Partners) about 2 years ago

WOW! I didn't know that either. I'm sure most people don't know. What a shock!

Posted by Patricia Feager, Selling Homes Changing Lives (DFW FINE PROPERTIES) about 2 years ago

And that is why consumers should take great care with their credit obligations...you bought it, you pay for it...so simple

Posted by Lisa Von Domek, ....Experience Isn't Expensive.... It's Priceless! (Lisa Von Domek Team) about 2 years ago

I learned something new from your post about the seven year rule. . 

Posted by Gita Bantwal, REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel (RE/MAX Centre Realtors) about 2 years ago

This is so true Joe - my husband learned this many years ago - bottom line... don't ignore a debt - pay it off before it goes to collection!

Posted by Jennifer Mackay, Your Bay County Florida Realtor 850.774.6582 (Counts Real Estate Group, Inc.) about 2 years ago

"Seven years after the original default date, all mentions of a debt -- no matter who has bought the debt or when -- have to come off your credit report, says Maxine Sweet, vice president of public education for credit bureau Experian.

According to the Fair Credit Reporting Act, debt collectors can't change the account number and consider it a "new obligation," and they aren't allowed to "re-age" that debt, says Tracy S. Thorleifson, attorney with the Federal Trade Commission. Seven years from the original default date -- that's it, she says.

One exception is judgments. If a creditor sues and gets a court judgment against you, they can keep the judgment on your credit report for seven years or until the judgment expires, says John Ulzheimer, consumer credit expert. However, as a matter of practice, credit bureaus keep judgments on a credit report for seven years from the judgment filing date, he says.

In other words, while the original obligation and any listings by subsequent collectors will come off within the original seven-year period, the judgment can have its own independent seven-year life span."

Read more: http://www.bankrate.com/finance/debt/6-ways-not-to-reset-old-debt-1.aspx#ixzz4CmqHWAlc

Posted by Denny Robert (Keller Williams Realty East Valley ) about 2 years ago

Some people just can't face it and chose to ignore it hoping it will go away. That is not the way it works in the real world.

Posted by Debbie Reynolds, Your Dedicated Clarksville TN Real Estate Agent (Platinum Properties) about 2 years ago

Collection companies often "sell" or transfer the information to a sister company just for the purpose of keeping the clock ticking. Make sure that when you do pay it off they agree to remove the item form your report, not just show it paid! 

Posted by Matt Brady, Lending With Competence And Character (Skyline Home Loans) about 2 years ago

Interesting information! I didn't realize the 7 years could restart again. Yikes.

Posted by Kat Palmiotti, The House Kat (Grand Lux Realty, Monroe NY, 914-419-0270, kat@thehousekat.com) about 2 years ago

You learn something everyday here on Active Rain. Great facts to share with the general public. 

Posted by Frank Rubi, FrankRubiRealEstate.com (Frank Rubi Real Estate, LLC) about 2 years ago

There ought to be a mechanism for forcing a credit bureau to remove an improper ding. Small claims court might be a good option.

When a creditor will not remove an incorrect report, it might well cost too much to force a removal thru legal action. The system is front loaded in favor of creditors who may or may not have valid claims.

Posted by Thomas McCombs (Century 21 HomeStar) about 2 years ago