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2nd Mortgage Transfer of Servicer --- does DEBT VALIDATION apply under FDCPA?

Gilroy, CA |

Original servicer filed for BK and another servicer sent us a letter indicating servicing was transferred to them, and have indicated an amount that just got ballooned from the original principal balance. It was also indicated in their letter that we have 30-days to dispute the debt. Requested for DEBT Validation. Their response: " Assets were purchased from XXX company who filed for bankruptcy. Records indicate this account was charged off. Please disregard previous letter" Disputed debt with Experian, and with updated results on credit report: " Paid, Closed, Written Off" -- matching status with original servicer.

Then today a Statement came in the mail. If Credit bureau has validated this to be Paid,Closed, Written Off -- can they claim it as OPEN and send statements?

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Attorney answers 3


The facts that you supplied are not sufficient to give an opinion about your liability for the debt. It sounds like you might have continuing liability for the debt, but you would have to consult with an attorney to get a more clear idea of your exposure.

Brad C. Brereton

In all cases it is advisable to consult an experienced attorney. Nothing stated herein is intended as legal advice for your specific situation, and you should use the information provided solely for the purpose of choosing an experienced attorney for the problems presented.


A lender could charge off your loan for a variety of reasons but continue to list it as unpaid on a credit report. Your question is unclear though. Either provide more details or contact a lawyer directly for more specific advice.



Thank you. Original servicer and the third party have both listed account as PAID, CLOSED, written off. Experian just updated status on the third party as such. Thus, I am assuming Statement sent holds no bearing?

Joshua Andrew Smisko

Joshua Andrew Smisko


Again, without reviewing everything I am not sure, but that could be the case.


Assuming I understand what you're asking: The credit bureaus and their reporting systems do not dictate underlying liability -- and a creditor "charge-off" does not mean that a debt has become legally unenforceable against you.

Your recent statement from the new servicer makes me believe that the debt is alive and well. The debt however, may be limited to being a lien against your property -- and you may not be personally liable. (E.g., if you filed for personal BK and did not reaffirm the debt and/or if the time to collect on the debt has run the statute of limitations period.)

Regardless, I recommend contacting a local attorney to discuss.