Can a Collection Agency Restart the Debt Clock on a Lease?

Question from Gringo Ray, Can a Collection Agency Restart the Debt Clock on a Lease?

Answer from AI:

When dealing with debts, especially those related to rental agreements, understanding your rights and obligations is crucial. The situation you’ve described involves several key legal concepts, including the nature of co-signing a lease, the transition from a fixed-term lease to a month-to-month arrangement, and the impact of these changes on your credit report. Let’s break down these issues in the context of Portland, Oregon, and provide some guidance on how you might address the concern with your credit report.

Understanding Co-signer Liability

First, it’s important to understand what it means to be a co-signer on a lease. As a co-signer, you agree to be equally responsible for the lease obligations, which typically includes ensuring rent is paid. If the primary tenant fails to meet these obligations, the landlord can seek payment from the co-signer.

Fixed-Term Lease to Month-to-Month Transition

Your situation involves a transition from a fixed-term lease, which had a specific end date, to a month-to-month lease. In many jurisdictions, including Oregon, if a fixed-term lease expires and the tenant continues to live in the property without signing a new lease, the agreement often automatically converts to a month-to-month tenancy under the same terms and conditions of the original lease, except for those that pertain to the duration of the lease.

Regarding the increase in rent, landlords in Oregon are generally allowed to increase rent on month-to-month tenancies with proper notice, which is typically 90 days. However, the specifics can vary based on local regulations and the terms of the original lease.

Co-signer Responsibility in Month-to-Month Leases

The key issue here is whether the co-signer remains responsible after the original lease term ends and transitions into a month-to-month lease. This largely depends on the wording of the original lease agreement. Some leases include clauses that extend the co-signer’s responsibility beyond the initial term, including any month-to-month period that follows. It’s essential to review the original lease agreement to understand the extent of your obligations.

Disputing the Debt and Removing It from Your Credit Report

If you believe that the collection account has been wrongly reported to credit bureaus, you have the right to dispute it. Here are general steps you might consider:

1. Review Your Credit Report: Obtain a free copy of your credit report from each of the three major credit bureaus (Equifax, Experian, and TransUnion) to confirm the presence of the collection account.
2. Examine the Lease Agreement: Carefully review the terms of the original lease and any subsequent agreements or communications from the landlord regarding the transition to a month-to-month lease and rent increase.
3. Dispute the Collection Account: If you believe the collection account is incorrect, you can file a dispute with each credit bureau that lists the account. Provide any evidence that supports your claim that you should not be held responsible for the debt under the terms of the lease.
4. Seek Legal Advice: Consider consulting with a consumer rights attorney or a legal aid organization that specializes in tenant rights or debt collection issues. They can provide guidance specific to your situation and help you understand your legal options.

Additional Resources

For more information on disputing errors on your credit report, you may visit the Federal Trade Commission’s guide on disputing credit report errors. Additionally, the Oregon Residential Landlord and Tenant Act provides detailed information on landlord-tenant laws in Oregon.

Please note: This information is intended to provide a general overview and should not be construed as legal advice. Laws and regulations can vary by jurisdiction and may change over time. If you are facing a specific legal issue, it’s always best to consult with a qualified legal professional who can provide advice tailored to your situation.