Gmail as Blacknet (legally required forgetting)

[Eric Cordian]

Tyler Durden writes:

> What the law actually states is (basically) a defaulted loan must be 
> forgiven after seven years. In other words, it is illegal to continue to 
> attempt to collect on a loan, 7 years after the default.

There are different levels of illegal.  The most important one is the
statute of limitations on suing the individual, and converting the
delinquent debt into a judgment, with which assets can be forcibly seized.

This varies by state, and also varies by whether there is a contracted for
amount in writing, such as a loan or mortgage, or whether the debt is an
"open account", which would cover revolving charge accounts with retail
establishments, and also in most states, credit cards.

A typical statute of limitations for open accounts is 3 years.  Contracts
can go up to 10 years, depending on where you reside.

You can still be sued over any debt, but you can move to dismiss if the
statute of limitations has expired.

The other axis of debt is "reporting", which is how long the credit
bureaus and other organizations which keep files on you can tell other
people about the debt.  This is typically 7 years for delinquencies, and
10 years for bankruptcies and judgments.  This only applies to reporting
for credit purposes.  Nothing is ever expunged from your credit file.  
The file is simply redacted according to who is requesting it.  LEAs, and
also in certain cases employers, can see your entire credit file from day
one, with information you have contested, and an audit trail of possibly
successful attempts to have it "removed."

Now, as far as collection practices go, there is absolutely nothing to
prevent your basic brand name credit card company with which you have a 20
year old delinquency, from offering you a financial product which includes
re-affirming all or part of an old debt, even one which has been
discharged through bankruptcy. 

For instance, they can offer you a new gold card with your charged off
balance on it, forgive all the interest and fees since charge off, charge
no interest, and give you 50 cents on every dollar paid off added to your
credit line, and free tickets to the Super Bowl, all "PRE_APPROVED."

This can do this with money you owe them, or with a delinquent account
they have purchased from someone else in the marketplace.

THe only restriction is that they cannot report you paid off the old debt
to the credit bureaus, if it is over 7 years delinquent.

In almost all cases, you're an idiot to accept such an offer, of course. 

So, as you see, all of this is a bit more complex than it being "illegal"  
to collect on anything over 7 years.  They can't win a lawsuit.  They
can't call you at 2 AM in the morning to bitch if you send them a "cease
and desist" notice.  But they can certainly trade your antique debt in the
debt marketplace, and anyone who buys it is free to think up all the
clever ways they can invent in order to seduce you to pay it off, before
selling it at an even greater discount to the next lowest level of the
delinquent debt food chain.

Now, occasionally, states Attorneys General get after companies who try 
and collect on old debts.  I remember a few years ago, American Express 
got some flack over its practice of letting people who went through 
bankruptcy keep their American Express Cards if they re-affirmed the 
balance.  

It is, however, a largely unregulated industry, aside from an occasional 
wrist-slapping.

-- 
Eric Michael Cordian 0+
O:.T:.O:. Mathematical Munitions Division
"Do What Thou Wilt Shall Be The Whole Of The Law"