Discover credit card is late – what can they do to me?
I have a debt with Discover in the amount of $2400.00. My last payment was in August of 2010. This has been more than 180 days which is usually the charge off number of days prior to a charge off. They are threatening to place a judgment against me if I do not make some satisfactory arrangements before April 29, 2011.
Can Discover do both a charge off and place a judgment against me?
—jacynthia
Short answer
A charge off is only an accounting step Discover has to take when a card has gone unpaid long enough. It does not stop them from collecting, and it does not stop them from sending the account to a collection attorney to sue you.
Key points on this page
- A lender must recognize a credit card as a non performing asset once it has gone unpaid long enough, and that is all a charge off is
- Discover can charge the account off and place it with a debt collection attorney
- A judgment cannot happen unless you are sued first
- If Discover sues and the case goes uncontested, or you lose the defense, they get a judgment they can then collect on
- Discover does offer hardship plans before charge off, often lasting 6 or 12 months, which may be enough time to get back on your feet
- The alternative is a lump sum settlement, and the question is whether you can raise around 50% of the overdue balance
Charge off is a simple accounting principle where a lender must recognize a loan or credit card as a non performing asset when it has gone unpaid long enough. A charge off event does not limit the creditor from continuing to collect or even sue you in an attempt to collect. Discover can charge off the credit card debt and send the account to a debt collection attorney to sue you.
You would first have to be sued prior to any judgment being entered against you. If Discover sued to collect on the credit card, and the matter goes uncontested or you lose in your efforts to defend the suit, Discover gets a judgment that can then be collected on.
Working out payments or settling your Discover Card.
What is your ability to make some type of payment towards the debt? Is your income stable enough to commit to a set lower monthly payment?
Discover does offer hardship plans prior to charge off. They may only last 6 or 12 months, but that may be the time you need to get back on your feet financially. Have you talked with them about a payment plan?
What type of money can you come up with in order to offer a lump sum settlement to Discover? Can you come up with 50% of the overdue balance?
Please post your answers in the comment section below, and I can perhaps provide more feedback.
About Michael BoveeMichael started CRN in 2004 with a mission to provide people in need with detailed debt and credit help and education. Michael has participated as an expert panelist in federal consumer protection rule making, collaborated on state law changes governing debt consolidation, has worked as an expert witness in court matters related to the debt relief industry. He is available to speak with you about your financial struggle and helps people resolve their debt problems daily.
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