Debts Not Included In Limitation Period
The description above applies to standard debts like credit cards and bank loans. Government enforced debts are not subject to the two year limitation period. In most cases government debts do not appear on your credit report, so there is nothing to purge after the six year time frame.
In other words, government debts dont go away.
Debts not subject to a limitation period, and that are not automatically discharged in a bankruptcy are:
- Large tax debts owed to the CRA
- Student loans
- Alimony or child support
- Parking tickets
Other debts like 407 ETR debts and a CMHC mortgage shortfalls can get complicated. Listen to the podcast to hear more.
Just because a debt is old does not mean that it goes away. If you have old debts, dont assume you can just do nothing. If its less than two years old, the limitations act doesnt apply and your creditor can sue you. If its more than six years old, its not on your credit report, but your chances of getting another loan at your former creditor is slim, or will come at the cost of extreme interest rates. If you owe the government money, you owe the government money. Theres no way around that.
The experts at Hoyes Michalos are here to review your debts and advise you on which actions you should take to deal with your debt. Whether theyre old or not. Book your free consultation today so we can help you make a plan to deal with your debts.
Resources mentioned in todays show:
If You Are Sued Never Let A Default Judgment Be Entered
You have nothing to lose by disputing the validity of the judgment or even settling it out of court to avoid that nasty record landing on your credit reports. Even if you owe the debt and it is not legally expired under the SOL – and you have no claim to vacate it – you should attempt to settle it out of court— before the court date so that it can be set aside.;
All the JC wants is their money so calling them to work out a settlement is the only smart thing to do. Otherwise, you may be forced to pay it later through wage levy or asset liens, not to mention the damage it will have done to your credit reports.
;Video: This video discusses how to vacate a judgment with the courts step by step.;
Removing Negative Items After Seven Years
Check;your credit report to learn when negative items are scheduled to be deleted from your credit report. When the seven years is up, the credit bureaus should automatically delete outdated information without any action from you.
However, if there’s a negative entry on your credit report and it’s older than seven years, you can dispute the information;with the credit bureau to have it deleted from your credit report.
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What Is A Judgment Anyway
As the late, great Stephen Covey used to say, Seek first to understand Without getting too deep into the details, lets begin with the four types of judgments that can appear on your credit report:
- Unsatisfied Judgments are the worst kinds of judgments. They are big red flags on your credit report. That is because they are essentially a public record of an unsettled debt.
- Satisfied Judgments are less damaging to your credit than unsatisfied judgments. That is because they indicate that you at least managed to settle the judgment against you. However, they still remain on the report for seven years.
- You should remove Vacated Judgments from your report. That is because they indicate that a finding of a previous judgment was overturned, usually as a result of a successful appeal. Therefore, it is legally void, as if the judgment never happened.
- Re-filed Judgments are judgments that refuse to die! Most people know that judgments stay on credit reports for seven years from the filing date, organizations can re-file an unsatisfied judgment. Therefore it stays on your report for another seven years, depending on when they expire, which varies state-by-state.
If you have an unsatisfied judgment against you, I would strongly advise you to consider disputing it. Throw the challenge flag. What have you got to lose?
There are several ways to go about disputing an unsatisfied judgment. Ill cover the whos and hows in the next section.
Removing Default Listings From Your Credit Report
You should know that the consumer rights of South African consumers have only been recognised for about five years now. This is thanks to the implementation of the National Credit Act 34 of 2005. It will take a very long time for South Africans to be aware of their rights and how to exercise them. The National Credit Regulator of South Africa has ensured all South Africans that all credit providing companies should adhere to the rights of the consumers. Unfortunately we are still seeing a lot of companies who are taking advantage of the lack of information of the consumers. You should know that 99.9% of all the credit providers have at least once broken a section of the National Credit Act when placing a default listing on a credit report.
A lot of us have seen a default listing on our credit reports. Then the obvious thing to do would be to settle the outstanding amount. You will then expect the default listing to be removed from your report, but it isnt. If you have settled the total outstanding amount of the creditor then you will see Full paid consequent to listing.
It is of importance that you know that a default listing whether paid in full or not will stay on your report for two years. There is only ONE way to get rid of these listings, and that is to answer the following two questions:
1. Have you ever received a notification IN WRITING from the involved creditor that they will put a default listing on your credit report?
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Wrapping Up: How To Remove A Judgement From Your Credit Report
Most judgments wont make it to your credit report, but you should still handle them right away. If you have a judgment on your credit report, it will knock your score down quickly and a lot and make it hard to get future credit. The best thing to do is to either repair your credit yourself or hire a reputable credit company.;
Its a lot easier today to remove judgments since the Fair Credit Reporting Act doesnt allow them, so take the necessary steps to remove them from your credit report today.
Additional Items to Remove from Your Credit Report:
Impact On Your Credit Score
Even though debts still exist after seven years, having them fall off your credit report can be beneficial to your credit score. Once negative items fall off your credit report, you have a better chance at getting;an excellent credit score, granted you pay all your bills on time, manage newer debt, and dont have any new slip-ups.
Note that only negative information disappears from your credit report after seven years. Open positive accounts will stay on your credit report indefinitely. Accounts closed in good standing will stay on your credit report based on the credit bureaus’ policy.
When the negative items fall off your credit report, it also improves your chances of getting approved for new credit cards and loans, assuming there’s no other negative information on your credit report.
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How To Remove A Judgment From Your Credit Report
Removing a judgment from your credit report may sound like a less successful venture than fighting City Hall. But I have some good news for those who aspire for credit redemption: judgments on your credit report dont always have to take seven long years to disappear.
Experian spells it out pretty clearly on their website: if a judgment is accurate, you cannot remove it. It will remain on the report for at least seven years.
While this is true, its also fair to assume that not every judgment is accurate. Thats where the opportunity for removal exists.
You may even think a judgment is rock solid. But why not go ahead and dispute it anyway?
If you do nothing, you will definitely carry that blemish for seven years. So it cant hurt to give it a shot.
UPDATE: All civil judgments are coming off all credit reports, for good. All 3 major credit reporting agencies are dropping civil judgments from their reporting after a Consumer Financial Protection Bureau study found issues with the ways that organizations reported these derogatory items to credit bureaus.
The rest of this article is in place for reference purposes. However, you should no longer need to remove a civil judgment from your report.
There are plenty of resources available to help you get a judgment removed. I know this because I once hired a firm myself.
I was deployed in a war zone at the time and was determined to have good enough credit to qualify for an auto loan by the time I got back to mainland.
Public Records And Your Credit Reports
Not all public records are included on credit reports. In fact, some types of public records were included in the past but have since been removed thanks to policy changes.
Heres an overview to help you understand which types of public records might show up on your reports now and cause potential credit damage.
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Your Options When You Have A Judgment Debt
When your;creditor;has a;judgment;debt against you, your options are:
- Consider trying to make a repayment arrangement with the;creditor;directly . Only agree to repayment arrangements you can afford.
- If you can make repayments, start making them;while you negotiate. This demonstrates what you can afford and shows you want to repay the debt.
- If you make an agreed repayment arrangement with the;creditor, get the arrangement confirmed in writing. Keep details of the repayments you make .
- If you are late with a payment on a repayment arrangement or an instalment order, call the;creditorimmediately and explain. Try to make an arrangement to catch up. If you cannot make an arrangement call us.
How Long Does It Last
So, now that it’s happened, how long does a judgment last?
Every state has a different time limit for every kind of debt. This time limit is called a statute of limitations. Here’s a list of each state’s statute of limitations for judgment debts specifically.
Statute of Limitations for a Judgment
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Ignore The Summons And Complaint And You Lose
Unless you file a written answer with the court within 20 days of being served, a judgment can be entered against you without your side of the story. ;You should also send a copy of the answer to the attorney who sued you.; All that due process requires is that you get good notice that you are being sued. ;Do nothing and the;creditor wins.; So what if you never got notice?; See #6.
Renewing A Judgment Restarts The Cycle
Potentially, a judgment can effectively become permanent; many states allow creditors to renew their judgments. So, if a creditor gets a court order or files an affidavit or other document, it can renew the judgment for another cycle. In some states, creditors are allowed to renew a judgment once or twice. In others, there’s no limit.
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Have Credit Repair Company Remove The Judgment
If youre unable to find inaccurate information or just dont want to deal with the court system yourself, the easiest and quickest way to remove a civil judgment is to have a professional work on your case.
work with credit reporting agencies on your behalf removing inaccuracies and disputing negative items from your credit history.
Within a couple months you could have your credit score back where it belongs.
These firms do charge monthly fees and a set-up fee. But for many consumers, this is a small price to pay for the peace of mind you get with a pro on your team.
I often refer readers to , a credit repair company staffed by helpful and friendly advisors who know credit repair inside and out. Check out their website.
What Is The Statute Of Limitations In Canada
The statutes of limitations for collection actions bars a creditor, or collection agency, from suing you after a specific time limit. After this times expiration, it is much harderand often impossiblefor a creditor to collect money from a debtor for an unpaid debt.
Canadian law starts with a limitation period of six years. However, each province and territory in Canada has its own statute of limitations. Each provincial limitation period as of January 2020 is as follows:
- Alberta: 2 years
- Saskatchewan: 2 years
- Yukon: 6 years
Limitation periods typically apply to unsecured debts. An old credit card debt, cell phone bill or gym membership account, for example, is subject to the limitation period. However, you cannot use provincial limitation laws to avoid a court judgment for:
- secured debt
- government debt, including student loans and tax debts
- non-dischargeable debts such as child and spousal support, fines and obligations arising out of fraud.
Provincial limitations laws do not apply to the Canada Revenue Agency. Generally, CRA collections has ten years to commence legal action for most tax debts and government student debt.
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What To Look For On Your Credit Report
Lenders use codes to send information to the credit bureaus about how and when you make payments.
These codes have two parts:
- a letter shows the type of credit you’re using
- a number shows when you make payments
You may see different codes on your credit report depending on how you make your payments for each account.
Why Can’t You Delete My Credit File At Transunion
TransUnion is a credit reporting company that operates under the Fair Credit Reporting Act. Your credit file is maintained as allowed by federal and state laws. The Fair Credit Reporting Act does not require credit reporting companies to maintain a file on every person, or require credit reporting companies to delete files at a consumers request. The Act does require the companies to use reasonable procedures to assure accuracy. Creditors may access your credit report only if they have a permissible purpose under the Fair Credit Reporting Act.
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Derogatory Mark: Account Charge
If you dont or cannot pay your debt as agreed, your lender may eventually;charge the account off. The charge-off will appear on your credit reports for seven years.
What to do: Try to pay off the debt or negotiate a settlement. While this wont get the charge-off;removed from your credit reports, it’ll remove the risk;that youll be sued over the debt.
Civil Judgments Dont Impact Your Credit Scores Anymore
Legally, civil judgments can appear on credit reports for up to seven years. And credit scoring models view these as negative marks that can lead to lower credit scores.
However, changes to credit reporting requirements and company policies in 2017 resulted in the removal of all civil judgments from the consumer credit reports from Equifax, Experian, and TransUnion.
As a result, civil judgments currently dont appear in your credit history or hurt your credit scores. The changes also lead to the removal of liens from their credit reports. If the policies change, you may see judgments and liens appear on your credit reports in the future. In the meantime, you can still find another type of public record, bankruptcies, on credit reports.
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Civil Judgments Appear On Your Credit Report
Any judgment entered against can appear in the public records section of your credit report.;;This item can bring your credit score down significantly and once a judgment is entered against you it may remain on your credit for several years, even if you satisfy the debt.; The credit report would just be updated to satisfied and not removed permanently.; Most debt;collectors dont report the debt to the credit bureaus, but rather the information is gathered from third party data aggregators who get the information from the court system.
Negotiate The Judgment; Don’t Just Pay It
If the judgment has been verified as timely and you have no other documentation to prove it is not, then you can negotiate with the JC to dismiss the judgment in exchange for money. This is a much better rating than a “satisfied judgment”. It tends to indicate that it was dismissed, therefore “legally void”. This IS a better rating than showing you simply paid it- that means you owed it. Not much of a credit improvement.;
Make sure when you negotiate with the JC that you put your terms in writing and have the JC sign and date it. This can be used for proof later if the rating doesn’t change on your credit reports. Once you agree, the JC will complete a form called dismiss the judgment and file it with the court. All public records are reported to credit bureaus so you should see your new rating in about 30 to 45 days. A dismissed judgment is very different than a satisfied judgment. Remember that.
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