The term charge off describes an accounting function followed by your lenders. When speaking of revolving consumer credit card accounts, a charge off occurs when the credit issuer either chooses, or must, recognize an unpaid loan balance as a loss.
For lenders, losses are bad news. The bad news gets reported and can affect anything from loan loss allowance/reserves, securitization, liquidity, even solvency.
Because of the bad news nature of a charge off, your credit card issuer will generally wait until the maximum time allowed to charge off your unpaid debt. The time frame for your creditor to recognize the loss on your unpaid credit card balance is outlined in Generally Accepted Accounting Principles (GAAP) and is typically 180 days of consecutive nonpayment, or what the Office of the Comptroller of the Currency (OCC) has designated as “seven zero billings”. There will be instances where charge off will seem to occur at 210 days of nonpayment.
Most lenders will wait as long as is allowable to take the charge off hit to their books, but they can take the hit earlier than 180-210 days. It’s just not a common practice.
What does this mean to you?
Charge off is an accounting function with implications for your credit report.
Somewhere before I started paying close attention to debt and credit issues, the term charge off got escalated from a simple accounting function, to a designation you find on your credit reports relating to unpaid collection accounts. The charge off event now has an extra implication for lowering your credit scores (though months of missed payments leading to a charge off do the heaviest damage). And the charge off event now has an impact on when and how you go about negotiating settlements, or whether you can consolidate your bills with any meaningful impact.
While you are trying to navigate your inability to pay all of your debts and when evaluating the different debt relief options available to you, understanding the timing and affects of your accounts charging off will give you a needed advantage in your planning and timing.
The period leading up to, during, and after a charge off of your unsecured debts will impact:
- Debt collection efforts with your original creditor
- Debt collection with outside collection agency
- Debt Purchasing and subsequent collection efforts
- Debt Settlement/Debt Negotiation
- Credit Reporting
- Debt Management Plans
- Risks of being sued on unpaid debt
- Biting the Bullet and Filing Bankruptcy
- Delaying a Bankruptcy
Each one of the bullet items above is deserving of a separate article. I will be posting some consolidated information covering credit card charge off in coming months.
If you would like to speak with a pro for free to discuss your specific situation and what you may be able to do to deal with debts not yet charged off, or that have already charged off, and now you are dealing with the debt collection pipeline, request a free consult with me.
If you have questions about anything covered above and would like feedback, post in the comment section below.
Hi,
I received a letter from Chase bank offering me to “pay less than the unpaid balance.” Unpaid balance is $11,137.92 ($1,137.92 is overage charges) – this has been a charge off on my report since Sept 2016. Today, they are offering to pay $3898.71, and reporting t the credit agencies that it will be “Paid for less than the full balance”. How will this affect my score if I pay the settlement? Thank you for any advice
Is this the only unresolved negative on your credit reports, or are there others? If so, how many others?
Hi Michael. I have 2 credit cards that’s a charge off from Capital One on my credit from 2015. One of the debt collectors who last contacted me was Firstsource Advantage, the balance due on this one is $1,089. The other debt collecter is Portfolio Recovery Associates, the balance is $320. Firstsource first offered to settle by paying them 40% of the amount due in November then they offered 30% in December. I was hoping they would go as low as 25% this month but I haven’t heard from them via mail. I have not picked up the phone to communicate with them because I knew I wasn’t in a position to pay them right then over the phone and I didn’t know if it was safe to negotiate over the phone about them taking it off my credit report. I just received a letter from Portfolio Recovery this month asking me to pay $256 of the $320 that’s owed. How would you advice that I handle this to take it off my credit so I can purchase a house? This has a really negative impact on my credit score so please help me on the correct steps to handle this.
You will not be able to get Capital One or Portfolio Recovery Associates to remove the items from your credit reports. You can expect them to update your credit reports to show the accounts have been resolved, and a zero balance owed. You can still reach your credit goals after that, so try not to get hung up on getting these items off, as pay for delete is not common.
Read through a couple of additional resources before you call PRA or First Source:
Negotiating with a debt collector.
Getting your settlements in writing.
I found out that B of A reported a Collection/Chargeoff in March of 2015 for a debt when I was going through a difficult time. The last payment date to B of A was in January 2013 and the account was closed in 2008. I honestly cannot remember if I had settled this one. When would it the 7 year time frame start for it to come off my credit report? Should I try to contact them at this point?
The 7 year credit reporting begins with when payments stopped.
If your goal is to improve your credit situation, I would contact them, but to arrange a settlement for less. How much is owed to BofA?
I recently contacted the collection agency to settle an account I have on my credit report for a medical bill that was sent to collections in mid 2011. The default amount was $100, Upon calling the collection agency to pay it off, I was informed that they would delete the account for a payment of around $170. I told them I was not prepared to pay that amount and would need to call them back. I plan to call them back to negotiate a lower amount for the deletion but really don’t know if I should waste my time and potentially do more harm than good. My credit score is in the low 700’s and the account is due to fall off in the next couple of years.
Do I run a risk of hurting myself if I try and negotiate for a deleting without success? I will not pay more than the $100 originally owed.
If you will not pay more than $100 than it does not matter about any more harm from passing up the pay for delete offer.
I would hold out if it were me. Paid medical collections do not hurt your credit much at all anymore anyway.
Can this credit union just now report a charge off 4 years later on my credit report?
In 2008, I took out a personal loan through my credit union. Towards the end of 2010 I ran into financial difficulty and could not afford to pay my debt back. In 2011, my credit union reported my derogatory status and closed the account on my credit report. That same year they filed a judgement against me, which I ended up satisfying in 2012. I have court documents stating this settlement. Now it’s 2016 and this credit union is just reporting that they charged off the account and are showing non payment for 2014 – 2015. Because of this it has dropped my credit score 30 points.
What you shared would appear to me to be incorrect credit reporting. If it were me I would likely file a credit reporting and debt collection complaint against the credit union with the CFPB.
I recently had a Charge Off reported on credit report, and this is something that I’ve owed for the past couple years. It’s a little bit over $2000. I lost my job last year, and I couldn’t make payment. My question is, should I still make an effort to repay them? or try to negotiate for a lower amount? I really need the negative mark to be off my credit report since I’m trying to get a car. What should I do?
It is often a good idea to negotiate a lower lump sum payoff on charged off debts. You can prevent being sued and improve your credit and financing options.
You will generally not be able to negotiate the charge off being removed from your credit reports, but that is not all that big a deal. It will fall off from age, and you can get home loans and other financing with a paid charge off or collection account.
Who is the last known debt collector that contacted you on this account?
1. Chase brought my credit card account from Chevy Chase via another bank sometime between 2007 and 2009. It was closed at the time of first bank transfer. However, after Chase received my account, they continued to charge me interest on a balance transfer originally under Chevy Chase even though the account was closed during the original bank transfer. I contacted them and ask why they were still charging me the high rate of interest, and was told that they could because part of my account balance consisted of a balance transfer. Could they do this?
2. I applied for payment protector insurance on the transferred credit card account that was closed for purchases and another Chase credit card account in 2010.
I became totally disabled in Febuary 2011 and retired on disability in March 2012. I filed a claim under the insurance for both credit card accounts in 2011. I received a letter from Chase stating that I could not file a claim under payment protector for the transferred account because it was closed, even though they were deducting the premium from the accounts. Is there no recourse now?
3. In 2012, I spoke with a bankruptcy lawyer and was advised to stopped making payments. So, I did. I eventually did not file bankruptcy. Prior to my conversations with a lawyer, I explained my health and financial and made several requests to Chase to lower my monthly payments to something that I could manage to pay, but they said no.
After a few months of non payment, the collection services and I came to a settlement agreement and made payment arrangements through the collection services and paid the settlement amount off in 2013? The balance was around $14,600, and we settled for around $4,600. I was not made aware that I had to pay taxes on the unpaid portion until after it was paid in December 2013. Then, in January 2014, I received a letter from Chase regarding paying taxes on any unpaid portion over $600 and a form 1099 for the $10,000.
Is there any recourse at this point?
1. If it was part of your contract, and that part of the contract survived the account transfer, it would be pretty common for the bank to continue to charge the higher interest rate. Short of taking them to court to get to the truth of the matter, I would say at this late date, yes.
2. Banks, like Chase, have had to settle large lawsuits and actions stemming from their policies, procedures and marketing around payment protection plans. You may be eligible to receive compensation in the form of money, or credit toward the outstanding balance, so check into that.
3. I would consult with an experienced debt collection defense attorney about whether it is worthwhile to pursue any recourse for failure to disclose the tax implication of forgiven debt. No matter how that shakes out, the IRS will probably not care, as they will still see this as an income and taxable event. If you met the insolvency rule at the time you paid off the settlement you may not owe any tax.
I had a second mortgage through Fifth Third that was “Charged off” in June 2009 when i sold my house as a Short Sale. I agreed to pay $55 a month for 30 years at zero % interest to their Recovery Collections department. I have paid this payment every month since the agreement (auto pay). Looking at my credit reports I see N/R for Not Reported July 2009- May 2012. Then for the months June 2012 – Feb 2014 I see CO for “Charge Off” again! I am still paying on this debt as of March 2015. The Status Detail section of the Experian Report states : This account is scheduled to continue on record until Oct 2015. What is going on with this account I cant get any information from Fifth Third. Do I have to keep paying this; can it hurt my credit report if I stop? How can Fifth Third record a second CO? What is the SOL? I live in Michigan and my first missed payment on this loan (before the short sale) was in Jan 2009.
From what you shared it sounds like the whole issue will come off your credit report this October, and that sounds about right given the dates.
If you stop making payments they can sue, and if the get a judgment, that can hurt your credit all over again. But the second mortgage charge off should not reappear after October if payments stopped.
I reside in Texas and on December 11, 2014, I received a tax bill from IRS for year 2013 due to a Capital One write off — 1099C. The amount written off is $1031 and bill $157 according to IRS. I’ve never received anything from Capital One.
About 2009, I received a notice from IRS due to a Bank of America write off for, would you believe, $25,000 and tax bill for almost $6000. Never received any notices from BOA. This account was due to an identity theft I never knew of until the notice from IRS. For the next several weeks I talked to bank employees, then in-bank attorney, then finally outside attorney. No one could give me dates of charges nor places, no valid account number — it was not 16 numbers. Only date opened and write off could be provided–opened in 1992 and closed about 1997. After I hounded the outside attorney almost daily, the IRS and I got the corrected 1099C form showing a reversal of the write off. I never gave up. I also informed BOA they were the mortgage holder of my current home.
Was it legal or past IRS and/or laws stating the statute of limitations or past the guidelines for standard accounting principles set by GAPP and policy of Office of the Comptroller of Currency? You mentioned some days of 180 to 210. And mine are over 10 to 15 years?
IRS said I must file an identity theft report with the Department of Justice. Did that. When BOA gave me dates of opening and closing, I knew something was wrong. A former business partner stole over $30,000 from me in 2002 so I reported that he was the likely thief of my name and SS number. No charges due to statute of limitations except the 2002 theft.
Back to current day and new, and another, bad 1099C. Again I never had an account with Capital One in the 1990’s. I am assuming the bank will have about the same dates for opening and closing the account. IRS gives a 16-digit account number whether verifiable I don’t know yet.
How can they wait over 15 years to act and write off an account? I refer again to your reference to accounting practices/policies/principles set byour GAPP and OCC.
I will fight this too, but how long can this continue with old debts set up through a stolen identity? There’s no telling how many of these could continue to appear. How do I put a stop to any future ones? Oh the final kicker, like BOA being my mortgage holder, I HAVE A CURRENT CREDIT CARD WITH CAPITAL ONE and a zero balance.
Thanks for any advice or enlightenment.
The charge off event I speak to in the article above is not the 1099c triggering event you experienced that involves the IRS. That IRS tax is on forgiven debt, and is wholly different than revolving consumer credit accounts being charged off after 180 days of consecutive non payment. Here is more information about taxing forgiven debt, with links out to further explanation: https://consumerrecoverynetwork.com/debt-forgiveness-taxes-settled-credit-card/.
Capital One, and other banks, should not wait 15 years to formally forgive debt. Frankly, I do not know if there is much of an appetite for putting a strong policy together to force banks to formally forgive debt, say right after the account holders state SOL to sue expires (Texas would be 4 years of no payment). That kind of thing would just beat down an already struggling demographic of consumers.
I would encourage you to file complaints with the CFPB about your current issue, but only if contacting Capital One first, leads to a whole lot of passing the buck and wasted time.
I have been a single mother of 4 who could not afford insurance, I have a medical condition that lands me in the ER often with being said I have 12 negative items on my credit that are all medical bills from a 5 different medical groups. They are all over 3 years old, would I be a good candidate to settle these bills, I would like to increase my score before my child goes to college so I can be in the position to assist with the cost.
Irina – I posted a response to your similar comment posted to one of the you tube videos. If you answer the questions I posed for you over there, I can off more than just generalized feedback. And it would be best to not have two discussions going about the same thing.
dear micheal a credit agency notifyed me on 9/10/2014 that I have hospital bill in their office for the amount of $4000.00 and I need to have this bill payed off in 6 month. She also stated that she needed to see my check stubs and I need to fax those to a her as soon as possible alone with 6 blank checks. I told her I that I don’t write checks on my account. She ask what could I pay I told her $25 every two weeks she said before she could approve this she would have to see my check stubs. Is this a good idea I told her what my bring home pay was and I have other obligations. I didnt denied the bill and it will take a will to pay it off but I’m will to pay what I can. She keep saying she could take other legal actions. help me please
How old is this bill? Have you approached the hospital about any payment plans they may have had for you? Have you looked into whether you qualify for partial of full write down from the hospital (some hospitals will write off x,xxx,xxx.xx dollar value of services each year. If this hospital does that, you may qualify.
No, it is generally not a good idea to share too much personal information with a bill collector of any flavor. Not unless the info you share would fully support your position that you cannot pay, or can only pay what you have indicated.
Find out what you need to from the hospital about their indigence policies and post an update.
The problem is that I need to get rid of these collections so my husband and I can proceed for looking for a house. We were told that these need to be removed in order to get approved for a home loan. My question is, what do we do now that the collection agencies haven’t responded? Should I send another letter and ask for a 50% settlement (my first letter I asked for 25%). I’d rather not pay the $3300 in full since it is so much. I could pay 50% and probably the full amount of the the $672 collection.
Or could I send a check and in the memo line, write “payment for deletion of account on credit report.”?
Thanks!
The check for less than the balance owed with the memo note is often referred to as “novation”, or “restrictive endorsement”, and will not get you anywhere closer to your goal.
The collection agency may not respond to your offer at all. Most collection scenarios do not get settled with written offers like you have made. And yours may not qualify for any form of settlement, but then again, the collection agency may be able to accept a settlement, and your idea of offering 50% may be just the ticket. Only, I would call to see about negotiating, not write to them again.
If they are able to negotiate a pay off for less than the bill, be ready to pay what you must to realize your goal. But do not expect that they will remove the collection from your credit reports, because they may not. But even if they don’t remove the collection, they must update it to show no balance is owed. And that will generally still get you approved for a home loan if your credit scores are above 620 (even lower in some limited scenarios).
The debt collectors job is to get paid. Everything they do, say, or ask you, is designed to get them money, and the most possible. You need to give them every reason to accept less than what is owed on the bill. You may want to read through this post, and all the comments, for tips and realistic expectations before you make the call: https://consumerrecoverynetwork.com/question/settling-charged-off-credit-card-debts-with-collection-company/
I am trying to negotiate 2 medical collections with 2 different collection agencies. They both have validated the debt; however, I cannot afford to pay the full balance. I have sent certified letters to both collection agencies and offered to pay 25% of balance and I have not received a response. I gave them both a 15 business day time frame tor respond and they both have not. I don’t know what to do at this point but I need to resolve this asap since my husband and I are trying to purchase a home. PLEASE HELP! I’m not sure how to proceed at this point. We live in IL and want to buy in IL. Thanks in advance for the help!
How old are the bills? Who are the collection agencies you are dealing with? What are the balances owed?
Hi Michael,
Both medical bills are from 2010/2011; however, they were just validated by a credit repair company and now they are showing up on my credit report as “newly reported” on 5/2014 and 7/2014. It stinks because I heard that the statues start all over again and these bills won’t fall off from 7 years from 2014. One collection is from Medical Business Bureau ($672) and the other is from Merchant’s Credit Guide($3300). I appreciate the help!
Thanks!
Thanks for the additional details. One additional question – Were any portion of the bills or related services covered by medical insurance?
No, the credit reporting statue of limitations does not get restarted. That will still end in 2010/2018 and not 2021. Even making a payment or settling these will not reset the credit reporting removal date.
The amounts ($607 & $3300) were the remaining balance after insurance paid a portion. Both bills were related to emergency surgery that I had. I tried making payment arrangements for both before they were sent to the collections, but the monthly amount that the originial creditor wanted per month was too costly and I couldn’t keep up. Therefore, they were both sent to collections.
That is good to know that the statues don’t get re-started. I was misinformed.
There may be deals in place related to your insurer that prohibit any reduction or settlement for less than the full balance owed on your part of the medical bills. If that is the case, you may be limited to:
Affordable payments – The debt collector can be friend or foe in this regard.
Bankruptcy – No way is BK a good option for this amount of debt. Are there other bills unpaid, or that are being paid (medical, credit card, etc), and how much are the balances?
Do nothing if you cannot get a payment you can afford and just wait out the collections unless you are sued (I have disliked this as an option for 20 years now, but it is one, even if meant to be temporary until finances can turn around).
What amount of money can you budget for these bills each month?
I shut my business down in 2006, and my credit went to hell in a hand basket, finally after 8 years I am able to start paying off on past due credit card debt. Most have been charged off or sold, If I pay the ones that are still contacting me, will my score go up? I see others on my credit report that are charged off and they are not contacting me, what happens with those? they show a zero balance
Michelle – What state do you live in? When were your last payments made on these accounts. I can offer better feedback and perspective I knew the answers to those questions.
Also, what credit and financing goals do you have in the next 12 to 24 months?
Hello Michael,
I am at my wits end and about to have my wife suffer a heart attack. Years ago when I was working I received a bank of america credit card for 3,000. I was working as well as my wife then. I became disabled and have recently recieved a call from a Leigh and associates in eastvale california, first a phone message from a Trevor Martin telling me on the message that I was to call “the firm” back at this number it was an urgent matter and demanded attention. I called and spoke to a larry hunnicut who then transferred me to Mr. Todd samson, who said a case number and that charges were being filed monday august 18 for fraud. I asked him who he was he said he represented this firm that held the account. I didnt deny the bill except to respond that we received no paperwork from this firm about this debt. He gave me my social security number last four digits and my wifes also. He then told me i had to pay a certain amount to settle the debt of 4,000. It was including interest and all. He wanted me to give him my debit number because it would be easier for the accounting dept to track, i offered money orders for receipt purposes. Anyway after many calls, he called back saying he was waiting to hear from me for my debit information. I told him when I received paperwork I would deal with this. My wife called back and asked for this “lawyers” bar number he said he would send it. Please help me we are seniors who made some terrible choices, mistakes, and all we have is our social security, they are threatening to sue us and my wife is terrified. They called us back and said that they would settle for 1600.00 what do I do, I dont have that kind of money laying around… we just heard from this firm yesterday august 13, 2014. Can you help? PLEASE?
Ken – There is likely nothing urgent to your situation like the debt collector is suggesting. In fact, threatening you with fraud charges being filed is the hall mark of a debt collections scam operation. Legitimate debt collectors do not make threats like this. Can you be sued for collection of a debt? Yes. But debt collectors sue in civil court, and not for fraud.
I would encourage you to file a complaint with your attorney general and also the CFPB here: https://www.consumerfinance.gov/complaint/.
If you hear from them again, let them know you file complaints as you think your rights are being violated.
You should also run your scenario by an experienced consumer law attorney who regularly files actions against debt collectors for abuse of your rights. This type of attorney often takes a case like yours for no charge, as they expect to have their fees covered by the other side. What is the name of a nearby larger city? I can email you contact info to an attorney with the experience you need.
I would not offer a penny for this debt, even if you know you owed it at one time, until you know the collector is legitimate, and right now, the little you have shared suggests they are not.
Hello Michael they called again today different people this time. They are in east ale California San Francisco is another city there. I am desperate. They sent my wife paperwork through her email and want me to sign it and fax it back. Please send me referral to call someone please. Thank you scared to death. He told me being sued for malicious intent. Eastvale California is where they are.
It is Saturday, and you will likely not reach anyone until Monday. Do not respond to anything or anyone until you speak with your states attorney generals office on Monday, and try to connect with the California attorney I am emailing you contact information for.
Did you file that complaint with the CFPB last month like I suggested? If not, do that today, and include all this new information.
Do all of these things and you will no longer be scared of any of this.
Do not let any of this upset a perfectly good weekend.
And, just to add to the prior comment about debt collectors calling and referring to fraud charges, legitimate collection companies and their employees are talk about malicious intent… like ever.
My auto correct did not do me justice. The account was never reopened. It remains closed. I have not recieved my points back and the negative reporting on my account still remains.
I was in a car accident and had to go on disability (still am on) I called my creditors to inform them my income stopped and the disability payments were much lower than my outflow to work out payment plans to avoid having to file bankruptcy or obtain bad credit. American Express put me on their hardship payment plan and I started making the payments monthly to pay off the balance (this was my companies card so balance monthly was large) I was in and out of the hospital for a few years and during this time , WHILE I was making the payment AE closed the account, wrote it off on my credit report, and turned in over to someone who began harassing me for payment. I had no idea until receiving the collection letter that they did this. And still, I’m making my monthly payments as agreed. I had to make a deal with the collection attorney ( working on behalf of AE) to pay if off and in a letter they sent me then they would, reopen the account, give me back my points, and remove the derogatory credit information. The write off on my report had started a snowball effect and all my creditors lowered my limit to below my balance “based on my credit report” and I am wiped out me going under fast. I had to borrow money to pay the balance of the AE platinum card off to regain the agreement we had when the payment plan was put in place. I wouldn’t loose the account, the points and no bad credit reporting. While arranging this, I received documents from the court suing me for the amount! So I had to add the court fees to it, re- do the payment to them and they said they would close the court case. They closed the court case, and marked my credit report as closed/was my write off and the negative reporting never was removed. The account was opened and they did not five me my points ( I have so many letters from them saying this is the way is was, and then that this is what they would do) and my credit has dropped lower and lower – I can’t get money out of my house, I can’t do anything. How can they do this? I am still on disability, and do not know how to fight them anymore.
Paul – Who was the collection agency and/or collection law firm you dealt with on this? What are the dates involved (this year, last, longer)?
I had a credit card charged off by Bank of America. I had an offset or debit for the charged off account deducted from my bank account in July of 2013. I was told by BOA if I wanted to prevent an offset for a charged off account I needed to set up a payment plan. I called BOA to set up a payment plan in December 2013. At that time, I was told that there were no pending offsets for charged off credit cards and there was no need for setting up a payment plan.
On February 20, 2014, BOA applied an offset to my bank account for $7153.41. When I call BOA, I was told they had no record of my inquiry. When I provide the date and time of the inquiry, they refused to credit back my account, because there was a charged off credit card causing the offset.
Was it fraudulent for BOA to say that there were no pending offsets thus preventing me to set up a payment plan and then charging an offset anyway? Is there anything I can do to get the money credited back and setting up a payment plan?
Thank you.
Jerald – The whole thing you described is a little odd. Are these consumer cards and bank accounts used in household purchases, or accounts related to a business? Also, what state are you in?
I took out a loan for $1000.00, in September 2013. The first payment was due October 6, 2013. I was unable to make October and November payments. I paid the loan off in full in December 16, 2013. On my credit report it says charge off, paid. Is this disputable? I paid the loan in full as well as the mandatory addtional interest for paying the loan off early. It was a 6 month loan. Thanks for responding.
This loan was taken out from a bank.
Tauni – You can dispute the charge off entry on the credit report, but I am not sure it would result in anything different. Banks can apply charge off to their books and records when loans go unpaid far earlier than 180 days, but it is not a normal practice. Most want to keep losses off their books for as long as is allowed, which is why they wait most of the time.
I settled debt with a collection agent claiming they were “hired” by the original creditor to collect the debt. The debt was settled for approx. 70% of amount collector showed due, they reported the paid portion of debt, then unpaid portion of debt on my credit report. Will this affect future credit for me once debt has disappeared from my credit report?
Dee – I want to be sure I understand what happened.
You settled a charged off credit card debt with a debt collector working for your original creditor. Was the debt collector reporting the debt on your credit report, or was it only the original creditor?
Once you paid the settlement, your credit report was updated to show you still owe a balance as of today (they reduced the amount owed by what you paid only, and still show an amount due)?
Is that what happened? If so, please confirm in a follow up reply, and I will offer further feedback. If have this wrong, please provide more details. Either way, something is amiss, and I want to help you resolve it.
The account shows as zero, account paid for less than full balance, charged off account, but is listed under Adverse Accounts on the credit report I just received (an employment offer was rescinded based on my consumer report). My concern was this showed under adverse -yet it was negotiated and paid less than balance after going to collection. Not a good message for clearing up debt mismanagement…
Of further concern:
I have two more accounts on the report listed as zero due creditor, account transferred or sold, charged off account. Then the accounts appear as collection account with a collection firm for amounts well above the original debt.
As I attempt to resolve these issues I am concerned the same thing may happen again, and as I have not been actively employed for several years this is obviously not the desired outcome.
Dee – The zero amount owed reporting is in line with what you can expect with this type of thing. The accounts showing in the adverse reported items is normal as well. They are late pays or collection accounts, so are categorized as negative/adverse.
The other 2 credit cards that were charged off, which still have not been paid, but show a zero balance owed, means the account were likely sold off to debt buyers. Debt buyers reporting inflated amounts on credit reports can be due to the balances growing from legitimate default interest rates, or could be bogus (or unprovable) fees and charges. Are you working toward settling these as well? If so, who are the collection agencies that now have the accounts?
When did you last pay on any of these accounts to the original creditors?
What type of industry did you apply for work?
The accounts have passed through several agencies, so it is on-going. You have essentially answered my questions regarding the issues I raised. Yes, I am working towards settling the accounts mentioned above, hard to do on current resources yet good to know there are reasonable ways to resolve the issues even as it seems the adverse status follows me into the future.
Glad to help where possible.
I was asking about when the last payments were made to establish when these adverse items will age off of the credit reports. Also to point out you need to be aware that debt collectors and debt buyers that show on your credit reports have had a tendency to re-age accounts – so that they fall off the credit reports later than they should have. Most collection entries (other than a court judgment) should fall off at the same time the original creditors reporting falls off.
Understood, last payments were made to creditors 2009 respective, you are correct in that debt collectors and buyers have re-aged these items according to the consumer report I received. The most difficult and pertinent part on the immediate would have to be resource location, negotiation, settlement, as well as when collection entries should fall off.
A cautionary tale for would-be credit consumers…
I have a debt from 2007 from citi card and it was charge-off in 2008. Today a collection agency has it, and they are adding interest to the debt every month from the original debt, it was 6000 and now they say I owe 15,000 what should I do. according to my credit report it will be remove in 2015. I’m trying to find a new job and I believe it will affect me getting this job.
Deirdre – What state do you live in? I have some feedback to offer you will want to weigh, but it will change based on whether the SOL for the debt collector to legitimately sue you to collect has passed. It would also be good to know the name of the collection agency appearing on your credit report. That would help me share my experiences too.
Thanks for the email reply Deirdre. It is better to post answers and any additional questions you have here on the site. This way other readers can learn from the exchange, and also follow along better.
Your states statute of limitations for filing a legitimate collection suit on a credit card bill has expired. If your primary concern is how this is showing on your credit report, here are some things to consider:
The credit card charge off reporting from Citibank is not going anywhere. It should show a zero balance owed to Citibank if the collector is reporting a balance owed to them now. Is that how it appears on your credit reports? This means Citibank sold the legal right to the debt sometime after they charged it off.
Getting this collection on your credit report updated, at this point, means dealing with the debt collector you referred to in your email. Getting them to accept a settlement for much less than the balance they say is owed will not be complicated. And this is how you can get the debt to reflect that it is resolved or paid on your credit report. If you are motivated to settle this, how much money can you pull together in a lump sum?
What type of jobs are you applying for?
Not all charged off accounts are sold to debt buyers. Some creditors do not sell debt at all.
Charge off is describes an accounting function. Once the unpaid is recorded as a loss at charge off, the creditor can hold the debt and continue collection efforts.
Lets find out if your creditor still owns the debt. I may be able to help you do that if you can answer a couple of questions:
Who is the original creditor on the account?
Who is the collection agency?
Who is the attorney debt collection firm?
What is the amount you are being sued for?
Answer in a comment reply, and I can respond with more feedback.
Hi,
Debt was charged off in March 2012. Collection Agency uses original Creditor as plaintiff on summons to appear in court next month. Is this legal? Should the collection agency be on he summons instead of the original creditor?
September is 6 months after the charge off. what legal authority does the collection agency have?