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Steve  asked the following question.

“Dear Steve,

I went through a bad time financial about 6 years ago. In 10/2004, I turned a vehicle back into the lender that financed it MMCA. I only ever heard from them once by phone and recently, in the last 90 days, they have transferred the old debt to a collection company showing it as an unsecured debt. This is from NH

The collection company has called the house trying to negotiate a settelment; What are my options, as it stands in the way of me now getting a conventional mortgage? I hate dealing with collection agents and I have a credit service disputing it, but I don’t know when it might drop off.

Thank you,

Steve”

Dear Steve,

The debt should drop off your credit report seven years after it was first reported. But bear in mind that just because it is no longer on the credit report does not mean that it is not collectible. Depending on the statute of limitations in your state you may still be sued for this past debt. Once the statute of limitations runs out you can no longer be sued but they can still try to collect.

If you have the cash on hand you could probably settle this debt for around 40% of the outstanding balance.

As long as this open and outstanding collections account remains on your credit report it does not help your chances of getting a mortgage. debt reduction