Bank of America – Settling My Charged Off Credit Card and Debt Collectors
I do have some knowledge of credit repair/collections/debts, etc, but I have some specific questions that I don't have answers to and there is a disconnect that happens in my mind when I begin trying to figure out where they truth actually is with respect to collections/charge off procedures, etc. I want to take the necessary steps to clean up my credit, but there are serious issues that I am having because there was about $35,000 of credit card debt that I let go, spread over different credit cards and I don't want to make mistakes tackling this issue.
Therefore, if you don't mind, I will ask several questions:
1) Part A: When a consumer (such as myself) stopped paying a credit card account....i.e. Bank of America...and it is 3 months past-due, am I correct that at that point, it sits in the internal collections department of BofA? (I had this happen to me, but not sure if this is correct).
Part B: After this account was Charged-Off, did BofA sell the debt or did it assign the debt, and how would I know?
Part C: Since a Charge-Off is a Write-Off (and in this question - BofA), usually doesn't the bank, BofA write the ENTIRE amount off their books as uncollectable debt and get covered by FDIC for the entire amount, and if so - how then can they sell the debt to a collection company if they already got paid...or do they only sell 10% of it for (i.e. - 10 cents on the dollar for the entire amount) and get covered for the other 90%?
2) Part A: I noticed that on my report there are charge-offs and open collections. In speaking to mortgage lenders, they expressed a concern and told me that all my open collections would need to be paid if I wanted to buy a house. Are these open collections assigned by the original creditor or was the debt purchased, and what about in the case of charge-offs....if it was a write-off, how could a collection company purchase it?
Part B: (Sort of mimics part A, but slightly different) When it says "Collection" on the report, not "Charge Off", does that mean this is a newly created collection item after the sale, after the Charge-Off occurred by the original bank, or did this collection report, while this was with the original creditor?
3) How would I know when specifically to use the debt-validation tactic? (as I read your blog on backfiring and I don't want it to backfire on me)
4) Is there a point in disputing an item that is being reported by a collection agency/original creditor, if there is still a balance being reported? (wouldn't they verify it anyway?)
5) Part A: Statute of limitations normally is 4 years from last DLA date....should I wait until this expires to try to delete the item or would it not matter? (as after 4 years they legally cannot collect on it)
Part B: Is there a point in settling a collection/charge off account (if this is reporting under different collection agencies), if the original DLA expired on the original bank account, or is there no way to stop them from selling/assigning and selling again to new collections...and how can I permanently stop this process?
If you can answer all of these, you are a hero because after reading too many forums and all kinds of sources, I still cannot fully understand the truth about this and where should I begin.
Thank you for your time and I really appreciate your help in advance.
What are the pros and cons of settling my charged off bank of America credit card that is with a collection agency?
—Adrian
Short answer
Bank of America tends to keep an unpaid card with its internal collection department at 90 days, but it does assign accounts out before charge off, and it can sell them after. Call the bank and ask who has the account now. Charge off is an accounting entry, not the end of the debt.
Key points on this page
- To find out which way your account went, call Bank of America and ask who it was placed with or sold to. If the balance was sold to a debt purchaser, that buyer may have sold it on again.
- You can also run the name of the company contacting you against the usual suspects in debt collection and debt buying, to work out whether they are an assignee or a buyer.
- Charge off is an accounting function. The debt remains collectable, and there is no FDIC insurance on charged off credit card debt. The FDIC insures depositor funds.
- Only one party should report a balance owed. If a debt buyer reports a collection account with a balance, the original creditor should show no balance owed to them.
- Disputing a valid entry is usually a waste of time and postage. A dispute works when the reporting is inaccurate, out of date or erroneous, or when the furnisher never responds to the investigation, in which case the item should be deleted.
- Debts past the statute of limitations often settle at the steepest discounts. Never let the collector know you need the account resolved for a home loan, because they will not go as low. If you are not resolving them at all, a cease communication letter, sent certified with return receipt, triggers rights under federal and state law.
1a. Bank of America does currently tend to keep accounts in internal collection departments when the credit card has not been paid for 90 days. That is not always the case though. BofA can and does assign unpaid credit cards out to assignment collectors prior to charge off.
How to Find Out What Bank of America Did with Your Unpaid Debt
1b. You can find out which way Bank of America went with your account by:
- Calling Bank of America and asking who your account was placed with or sold to – just keep in mind that if your credit card balance was sold to a debt purchaser, that buyer may have sold it off to another debt buyer.
- Running the name of the company trying to collect from you against a list of usual suspects in the debt collection and debt buying world and identifying whether the company is likely an assignee or buyer.
BofA insurance claims against the FDIC for charged off credit card accounts:
1c. Where are you getting your information about banks insurance claims with the FDIC? The FDIC insures depositor funds.
Banks charge off credit card debts that remain unpaid. If they sell the debt right away or later on, they would make an accounting adjustment at that time. Charge off happens as an accounting function. If Bank of America is later paid through a debt collector they hire, or sells the debt for say 9 cents on the dollar, they adjust the accounting.
You mentioned you are somewhat confused after reading many web sites and forums. I would suggest not putting too much value into anyone of them that gave you an impression there is FDIC insurance for charged off credit card debts.
Charge Off Shows on Your Credit Report From the Original Lender
2a. In this instance Bank of America. A debt collector may report an additional entry at some point as well. If a debt buyer is reporting the collection account, the debt buyer will show a balance owed, while the original creditor would need to show there is no balance owed to them (as they sold it off). Be sure your debt balances are not being reported as owed multiple times to multiple places.
Just because an account is charged off does not make the debt noncollectable. Charge off is an accounting function. The debt remains. As mentioned above, if something is paid on the debt after charge off, the amount paid, if received by the bank, will cause an accounting adjustment.
Debt buyers purchase charged off debts. It is a practice that became popularized after the savings and loan crisis in the 80’s. They buy the debt because the bank is a willing seller. The legal transfer right is your original creditors.
It is possible to purchase a home with unpaid collection accounts. Lending standards have tightened some. It is not too surprising you are being told that unpaid collection accounts are a barrier to a home loan. The barriers are set by the lenders and underwriting standards. The underwriting can change a bit from lender to lender or even from person to person. Resolving the accounts by settling them may indeed be required though.
Collection Agency Shows Up for the Same Account on Your Credit Report
2b. Accounts below that heading are all collection accounts. Accounts that appear there are generally going to be accounts sold off or assigned out to a collection agency.
Charge off is an original creditor reporting item and would appear in the banks trade line they have on your credit report.
Debt validation is your right:
3. Requesting a debt collector or debt buyer validate sets a few things in motion.
My cautions about debt validation are generally (but not always), aimed at someone who wants to resolve old credit card debts by settling them for less than the balance owed. If you want to verify the amount owed, or that the debt collector is the proper party to negotiate with, you can do that over the phone with your original creditor.
How and when a debt validation request would backfire on someone who wants to settle a debt will be situational. There is no way to cover this caution well without knowing a great deal more about who the debt were with originally, where they have been placed for collection along the way, and who has the debt now. If you would like to provide all the details about the accounts in a comment reply below, I can get into more useful feedback.
Credit report disputes:
4. There is a point to disputing an entry on your credit report. It requires your dispute be investigated.
If that investigation turns up inaccurate, out of date, or erroneous reporting, it gets fixed. If there is no response to the investigation efforts of the credit reporting bureaus by the furnisher of the information (bank, debt collector), the item should be deleted. If sending a dispute just because you don’t like something on there, but the item is valid, it would likely be a waste of time and postage (though not always).
Credit Cards in Collection and your states SOL
5a. If the statute of limitations is past in your state, disputing collection entries for credit card bills will run into the same issues as in item 4 above.
The longer its been since a payment was made on the account your disputing, there may be a slight increase in the percentage chance you get an item removed because no one responded to the credit reporting agencies investigation request.
A balance being reported as still owed on a collection account is not going to be the only validation metric. You could have a zero balance being reported by Bank of America, and no one else reporting the account at all. That would not mean you can easily dispute away the charge off entry on your credit report.
Settling Credit Card Debts Past the Statute of Limitations
5b. If old charged off credit card debts are passed the statute of limitations for you to be legitimately sued in order to collect, and the accounts are with debt buyers and collection agencies, it may still make sense to settle them for less than the balance owed.
In your case, you are looking to purchase a home but underwriting suggest you settle the old debts before being approved. Settling debts that are past the SOL for you to be sued are often done at the steepest discounts. Just be sure you are up to the negotiations and never let on that you are trying to accomplish something other than just settling and moving on with your life. If a collector is aware you have a credit purchase or credit report need, they may not go as low in the settlement they agree to otherwise.
The shelf life of unpaid debt:
There is really not much you can do to permanently stop the next debt collector or debt buyer from getting your debt and at least making one attempt to collect from you.
Bankruptcy is probably the most thorough way to eliminate collection calls and letter, but even then, collection calls can happen.
If your debts are passed the SOL for legitimate lawsuits, and you are not going to attempt to resolve any of the debts, you can always write cease communication letters to any debt collector or debt buyer you hear from. A cease communication letter triggers certain rights under federal and state laws. It’s the epitome of telling the collection agency or debt purchaser to go pound sand. If they don’t follow the law after receiving the cease communication letter, you can pursue them for collection violations. Be sure to send the letter certified mail return receipt requested and keep the green card and a copy of the communications you send in a safe place in case you need them later.
For more information about some of the topics covered above I would recommend reading:
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.
Hi Mike,
You and I had a conversation on here a couple of weeks ago about being “served” from a debt collector. I called the collector within 15mins of receiving the papers, and made a 100.00 payment. The next day I received a letter from the collector offering for me to use my tax return to settle at a reduced rate. I sent the offer to them which was for 1875.00 on 2983.00 debt. (I accidentally deleted the email responses that I received from you so I apologize for having to repeat all of this). Anyway, I haven’t heard back from them regarding my offer yet. I noticed just now that the filing date on the paperwork is dated for December, 17 2013 , but actually received it on February, 3 2014… Would they have intentionally held the paperwork to make sure that I didn’t contact them within the 35 day deadline?
Thank you for your help.
Kyle
Kyle – I am not an attorney, and cannot offer you legal advice, only offer some general feedback, which should not replace you speaking with an experienced consumer law attorney. I can help you locate one with debt collection defense experience if you would like. Just post the name of a nearby larger city. That said, the date a suit is filed in the court generally is not the date that starts the clock ticking for you to file a response. It is the date you were served that starts the clock. So, no, I do not think they were trying anything creative.
When you say sent above, do you mean took them up on the settlement offer and sent payment? Did you talk with anyone at the firm about the offer?
Thanks Michael. Actually, I did both. I made a 100.00 payment immediately over the phone, and it was the following day when I received the offer from them in the mail to settle for less by using my tax return. I haven’t heard any feedback since then but that was only about 10 days ago. I filed the Answer to summons this afternoon in person at the courthouse and they said that the 35 days started the day I was served, not the day that it was filed with them so I’m safe there. And, I stated in the Answer everything I’ve mentioned here as far as contacting them immediately, making a payment over the phone, and returning the offer to them (this was recommended by the court clerk so the judge would see that I’m trying to settle this).
The offer they sent me didn’t specify a particular amount (I came up with the 1875.00 myself. I’m just waiting to hear a response from them on that.
Okay, so it sounds like no 1875 was sent, just a firm offer relative to them sending you an offer after serving you?
I generally encourage people to negotiate on the phone and leave the documentation to the final stage of settling, where everything being agreed to is spelled out, reviewed to be complete and correct, any questions answered, and only then are settlement funds sent in on time to meet any date on the agreement.
You filed an answer, but it sounds like you pretty much agreed to the debt. At this point, if I were the collector or the attorney, my decision to settle for the $1875 will boil down to real time value of money (which is a motivator in the collection industry), and whether what is represented as available to settle is what I think I can get.
If you do call to check on where they are at in review of your offer, do you have any personal financial hardships that led to the inability to pay in the first place, that can be used to elevate how positively your offer is viewed?
Yes. I am in school full-time, and I had not been able to get enough hours at the hospital that I worked at because of over-staffing, so now I am applying at other hospitals and I mentioned that during the initial contact with the attorneys. They have no access to garnishing wages at this point because there are none. I did agree to the debt since it is valid, I’m just hoping that since they sent an open-ended offer to settle for less, using my tax return, that they will take it or at least a close amount. I didn’t call back to negotiate when I received their letter since it was only the following day since I had talked to them and I was still in panic mode. The reason I wasn’t able to get hours at the hospital was because they had hired a lot of new employees in preparation for a huge expansion that opens this fall and I was in a “flex” or “PRN” position which does not have a guaranteed number of hours.
Thanks Kyle. If I were in your shoes, looking at the same set of circumstances you shared, I would call and see about getting that offer to settle accepted. My concern would be that I have made myself look more collectable, and would assume the other side sees meas someone who, if they got a judgment against, would be likely to pay it, and the legal costs associated, in pretty short order (after school, or once working again). Not all debt collection is geared toward getting money “right now”, even though that is how debt collectors come off when going about the job.
Lock it in if you can, and be prepared to repeat your hardship, and for the offer to be countered with a higher amount.
Michael Bovee,
I just recently looked at my credit report. I went delinquent on an account with Nissan back in 2010. Nissan is reporting on my credit report that it was charged-off/sold or transferred, showing a ZERO balance, and closed. Just recently a collection agency, the agency who purchased the account, reported it on my credit report also. I was told to dispute it. I sent a debt validation letter, certified and return receipt, today to the collection agency. If they do not respond with the adequate information within 30 days, what are my rights? Do I send a letter to the credit reporting companies to dispute the collection agency so that it is removed? If it is removed, does that mean that the Nissan “charge-off” has to be removed also since they have the same account number? Thank you so much in advance for your help! It is GREATLY appreciated!!
David – In all likelihood your debt was legitimately sold to a debt buyer pursuant to your original contract having assignability/sale verbiage. Virtually all loan and credit contracts have them. The original lender is showing zero owed on your credit report, as they should. The new owner can report this, and with the balance owed to them, as they purchased your debt.
What is your goal with the dispute?
Debt collectors receiving your dispute, or validation request, are not required to respond within 30 days. And when they do respond, there is really not that much of a barrier for them to provide “adequate” information. But if they continue collection efforts before providing validation/addressing your dispute, they will run afoul of your rights found in the FDCPA, and perhaps state rights as well. But them not responding is not anything special. Happens all the time.
You can send a dispute to the credit reporting agencies to remove the collection item, but it may not be removed, and you should have a firm basis for your dispute. If a debt collector, or debt buyers trade line on your credit report is removed, it does not mean the original lenders credit entry should be removed.
Dear Mr. Bovee , can a scam fee recovery company actually recover $3,300 I paid in 2009 to help sell/rent my timeshare. I paid the $3,300 to a fraudulent timeshare rent/sell company.
I used a Capital One bank credit card to pay the fee. I did try to recover the money back in 2010, but was unsuccessful, as the cc bank took the money back after the charge back. The scam company produced the bogus contract I had signed originally, and showed to the bank and money was given back to them. Now 4 years later, I get a call from a recovery co. that says they can get that money back.
They will charge 30% of the $3,300, when I get the credit back into my CC account. I told them if the contract says “when your account receives the permanent credit” instead of just the “credit”, I will sign it.
Do I have a real chance of getting that money back? Or is this just another scam??
Ermel – I would have zero faith in the recovery company. What is the name?
Michael,
I just stumbled upon this awesome website as I was doing some research about old credit card debts and their impact on my credit score. Basically, we are looking to purchase a new home (after we sell ours which is currently on the market) and upon pulling my scores from each bureau they are all sitting in the 640 range. One of the loan options we are looking for requires a minimum of a 660 for approval and from what I am reading it seems the mortgage tri-merge scores may be lower than what I can personally get from the bureaus.
Before we officially apply I want to try and get my score above that 660 mark. We have zero credit card debt on current accounts but I have 4 accounts that were charged off in 2009 (loss of job, medical bills, etc.) . Anyway, I have been current on everything (1 mortagage, 1 car loan, 1 student loan, 3 cc’s with a limit of about $5,000 total) and I am struggling to see how much improvement paying off 4 c/o accounts, that are all 5 years old, can have?
Here is the information on the accounts that are c/o:
BOA – $6,927 – Charge Off
Chase – $1,294 – Charge Off
Discover – $2,997 – Charge Off
Verizon – $612 – showing as collections but there is no agency listed, just verizon
All 4 of these items show as scheduled to fall off the reports about this time in 2016.
My question is if I were to settle these accounts would it improve my credit score since they are so old?
Also, would any of these companies consider a pay for delete or is that just something I keep reading about on random sites and it really never happens?
Thanks for your time!
Mike
Mike – When is it that you are thinking of needing to apply for that loan product? I ask because approval could be contingent not just on the credit score, but also on any collection accounts being cleared up. I am seeing much more of that type of lender requirement these days.
How the collection accounts getting settled will improve your credit score will depend on what type of scoring is being used. A new model of Vantage score, for example, does not use paid accounts with debt collectors in their scoring model. FICO does use that info, but with different levels of impact, and with some time intervals that soften the impact (so something you can plan for/around).
None of the four companies you listed will play ball with a pay for delete strategy. What you read about as far as that even being an option is way over blown. It rarely is an option, and when it is, would not help the consumer much when there are multiple collection accounts showing from credit originators.
Michael,
Thanks for the quick reply. We are thinking about starting shopping in March. I am fine paying the debts off and plan to do that in the coming days (after reading everything you mentioned in this thread).
Based on your feedback it just sounds like at most I would get a small bump in credit score but my DTI will improve in the lenders eyes, is that correct? Any chance I pay the debts and my score goes down? Does a settlement vs paying in full make a difference in score impact?
Thanks again!
Mike T
Mike – Once debts reach this stage of delinquency, it makes little to no difference to your credit, whether you pay the balance off in full, or settle the debt for less. Having said that, paying the debt off in full, or settling, can cause a temporary drop in your credit score due to the newness being brought to a stale account. It is sort of a catch 22 where doing the right thing can hurt, but only temporarily. And where doing nothing could (and likely will), lead to a lender only approving your loan when the collections are resolved.
The DTI concern is very real too. Unpaid collection balances can be calculated into your ability to repay.
Given everything you have shared so far, if I were in your shoes, I would target settlements for the best savings, make sure the credit reports are updated to show a zero balance now owed on all collection accounts with all credit reports, and see where that puts you in 60 to 90 days relative to the loan product you are shopping.
Ok here is my situation… I had to stop paying on all but one credit card (the minimum is only $26 a month on the one I can afford) Bank of America is included in the ones I had to stop paying… I owe a little over $21000 I think to them. Capital one, GE capital (jc penneys) have all made deals with me to get me back on track but BofA will not help at all (I know they are not required too) the account will be charged off in a week in a half unless I pay $400 (I am currently around $3000 past due) my question is do I have repayment options with BofA after charge off or are they likely to sue? In the last 6 months I have paid little amounts here and there. Currently a settlement is out of the question… Any advise insight is greatly appreciated. Thank you
Bree – It sounds like you are trying to set up affordable monthly payments on all of your accounts. If you could get BofA to lower your monthly payment to roughly 440.00 would that work with your budget? Is the Bank of America account the only one of your debts (credit card or otherwise), not on a plan?
Unfortunately that amount will not work… I lost my job and was on unemployment for over a year (applying for more jobs then I could keep track of every week). My unemployment was stopped and it took a little over 2 months to get it straightened out. By then the damage was done. Bank of America would not make any agreements that I could afford. I also have a card at a dept store and my minimum on that one is $26 a month so it is the only card I was able to keep up on. I am almost caught up on the 2 cards that made agreements with me. I was able to secure a part time job but so far Bank of America will not come up with a number that I can do… I actually a Bank of America rep tell me that bankruptcy may be my best/only option when I contacted them last month. I’ve been trying for over 7 months to avoid going that route but I’m scared it might be my only option.
Bree – Let’s say the 21k with Bank of America could be negotiated and settled for 7 to 8k sometime in the next 12 or so months.If you are able to keep up with all other bills, and somehow develop a plan to come up with the money to settle the credit card with BofA (probably with a debt collector), you avoid bankruptcy. Alternatively, roll up all of those other debts in your bankruptcy and get a fresh start financially is appealing. If chapter 7 bankruptcy is an attractive path to you, and you are going that direction, I would want to start that right away so that my credit can begin improving sooner, and I could quit wasting my limited resources on paying the other debts.
I would also see chapter 7 as a last resort, and that if all other bills can be managed, I am filing over that 7 to 8k I reference above.
What are your thoughts given that perspective?
That is something to think about… In the beginning I was really worried about my credit score but now I’ve come to realize that my credit score is not my top priority if I can’t afford my basic needs… But I have another question you might be able to help with… I am married (since August of last year) and all the credit cards are only in my name. The debt is solely mine. I live in California which is a community state property. I know that I am able to file bankruptcy alone but I’m wondering if my spouse’s income is going to come into consideration. Without her income my income right now is about $10,000 a year. I have one car that is paid off (valued at about $3,000) credit card debt total around $34,000 and a car that is in both our names and we owe $16,500 (valued at about $10,000) We bought the car 2 years ago when we were dating. Any chance you have insight on how this might play out in bankruptcy court? If I file I want it to only be on me… Thanks for any info.
Bree – Talk that over with an experienced bankruptcy professional. Generally, total household income is going to come into the means calculation, and the car loan can be reconfirmed (keep paying the loan and driving the car).
I understand credit score and credit report concerns, but that should be much further down the list when dealing with debts that cannot be fully paid. I know you are realizing that, but for other readers, this report compares the impact of debt relief options to access to credit: https://consumerrecoverynetwork.com/credit-report-score-rating-debt-relief-programs/
Thanks for your input. After talking to BofA one last time and basically getting no where still I have no choice but to file bankruptcy. I feel horrible because every other card I have has bent over backwards to help me improve my situation and now they too will be included. I found a web site that had a “hypothetical” means test (with current information) and I entered in my income as well as my spouses. After the calculations it said our disposable income is in the negative which means I’m a candidate for chapter 7. Thanks again for taking the time to answer.
Your welcome. Do not fret over the other banks that were willing to work with you. All of them know that a percentage of accounts will never be paid. It is a cost of doing business to them, and calculated into their operations before you opened your account.
Back in 2008, I settled my credit card debt with BOA for approx $4K less than I owed them at the time. The good news is that it only shows on my Experian Credit Score, the bad news is it seems like I am taking about a 100 point credit hit from it. At the time my world was falling apart financially. Now things are moving well again.
My current scores are EX 630, EQ 715 and TU 721 from what I see after signing up with myFICO today.
I have a couple lates on an old Sears card that I opened in 83 and foolishly closed back in Nov. 2007. The BOA account is my second oldest account having been opened in 2000. My other credit cards were opened in 2011, 2012 and 2014.
So here are my questions – should I contact BOA and ask if I can reopen the account and payoff the $4K or just wait for the next 1+ year and let it drop off from the 7 year age? Is it even possible to reopen this type account?
Thanks in advance!
FRC – You cannot reopen an account with Bank of America that you settled like this. Even if you could, it would not change the credit report negative. You will have to wait for BofA to age off of your credit report.
It is a bit odd that there is such a large difference between Experian and the other two bureaus. Have you cross referenced that the contents of each credit report are identical in every way? It is also a bit unusual to have a settled, or even an unsettled, negative item on your credit report maintain its potency to drag down your credit score(s) this far along.
Do you have a specific credit goal you want to accomplish in the next year or two?
Thanks for the feedback. My goal is to purchase a home in the next 12 to 18 months.
I have been researching trying to understand more about my options to rebuild my credit score. And really BOA is the one item that I am uncertain as to how best to address. Yes, the BOA account is only reporting on my Experian report. It was dropped from the others over the past several years.
Knowing it’s only on my Experian report has made me cautious about what actions I take – not wanting BOA do anything that could result in reporting the trade line to the others (TU and EQ).
From what I have been reading – it does not sound like BOA responds well to Pay For Delete offers.
Any suggestions – or is just waiting for it to age off in the next 12 to 18 months?
FRC – Just from a credit score perspective, you are probably in good enough shape to get approved for a home loan with your current mid score. And certainly for an FHA loan.
That bank of America account is settled, and years ago now. It really should not be holding you back. Pay for delete with BofA is not an option.
I would encourage you to talk with a loan officer at your bank, or a local mortgage broker. If you already did that, and that is why you are focused on the BofA account with Experian, get some more input from someone else in you area. And be sure they do FHA loans too (not all do, and you will likely get a broader loan perspective).
everyone should be advised that ANYTHING you say on this website gets PUBLISHED on line for ever.. I am sorry I used my real name and I am sorry that I even USED THIS FORUM
Larry – Everyone should be aware that anything they post to the internet is public, not just on this site, but on pretty much any web site. Why did you expect anything different?
Having said that, I can and have edited peoples posts on request in order to protect their identity, or something else. I am very reachable and available to site readers by email and phone.
Would you like me to edit your posts to show just Larry, or LM (something else)?
Why are you sorry you ever came to this web site?
Okay, thanks a lot.
Yes, the BofA shows a zero balance on all three reports. The credit file on one reports shows the account went delinquent in 2005 as well as showing it again in 2006. But in between those time payments were made. But it probably does not make a difference. As for my credit goals. I just want BofA off my report. I want my score to be in the mid 800’s. I want my utilization rate to be 15%, half of what it should be. My utilization rate right now is not too high, but I want it very low, which is what I am working on, because I want to increase my credit limit on two of my cards by over 10k and in order to do this I know my utilization cannot be high and having BofA will not help, but I’ll see. Thanks again.
liddy – Okay. It does make a difference as far as having a legitimate dispute to get the item removed due to the age of the negative item. If the 2006 date you provided is the one you recognize as valid, you may have about 6 months to go for it to drop off your credit report.
It sounds like you have time on your side. Credit rebuilding can often be an exercise in patience. You have come a long way, with what I see as a short distance to go.
I don’t know; there might not be much more I can do, but any suggestions, I will certainly use.
Thanks!
liddy – You may be a bit early in your efforts, but the credit report showing the 2005 date that Bank of America was last paid could suggest otherwise.
It is normal for a debt collection agency/debt buyer like Cach LLC to show on your credit report in addition to Bank of America reporting a charged off credit card. The difference between the 2 negative items showing up for the same account is – if BofA sells the legal rights to the debt, like was done in your situation, the BofA credit report entry should show a zero balance owed to them, while the new debt owner can report the collection item and a balance owed to them. The fact you got a paid collection from Cach LLC removed is great.
Does the BofA account show a zero balance due with the credit bureaus?
A charged off credit card from a bank can show on your credit reports for 7.5 years from the date of last payment. If you stopped payments on your credit card in April of 2005, and never made another payment after that, it should of dropped off the credit report. If the last payment you made was November of 2006, the charged off account entry from BofA would likely drop off your report middle-ish 2014.
Paying Cach off for the BofA debt does not change anything with these dates.
If you are certain your last payment made to bank of America was in 2005 you could file a credit reporting complaint with the CFPB. If the last payment was that date in 06, look for that to fall off mid next year. If it does not, and if what you shared about all three credit reports showing that 2008 date, then you would want to get that corrected, and perhaps by filing the complaint with the CFPB.
Do you have a specific credit goal you are trying to reach?
Yes, on my credit report the first 30 day late payment was in 11/06. But I pulled up some old credit reports with BOA and one from 7/12 states that the first late payment was 04/05. At this point it may not matter because it seems the more I look thru all my credit reports, they all have different dates. My most recent report shows the first delinquency being 6/08. The BOA account was paid in full 5/09 to Cach LLC, which is Collect America. I was disputing CACH LLC/Collect America since they are a collection agency and it was finally removed last year, BUT it was the same account number as BOA and BOA is still on my credit report. Every time I dispute with the credit bureau or BOA my efforts always are the same. Account was verified. I have sent several notarized documents regarding this account. The final payoff went to Collect America/CACH LLC.
Like I said, Cach LLC removed the account of BOA from my report, but BOA still remains. I guess I just don’t understand that since the account Collect America had was BOA and BOA refuses to budge. So the tradeline of BOA was on my report twice. One with Collect America and one with BOA. Now I just was BOA on there. In 3/13 I spoke with a rep from BOA and told them my situation and the guy told me he would put in a request for deletion and it took anywhere from 30-60 days. I took his name and verified before we ended the conversation that he would submit the request for deletion and I hung up the phone hopeful.
Fast forward a month/30 days, I talked with another rep and they said they were waiting to hear back from the credit agencies. Finally, after waiting 60 days I called in and talked to a rep and she said a request for deletion was never put into my file and that the account could not be deleted. She said she saw were I talked to the rep in 3/13, but did not see anything about the account being able to be deleted because they were not allowed to do that. So, I was told to call the credit bureaus so they could remove the account because BOA said they could not do it; when I call the credit bureaus they said they could not remove it because BOA had to do it. See what I mean?
Hello,
I have a charge off on my credit report for Bank of America. Is there anything I can do to get this removed from my report. The account originally went negative in 11/06, and was paid in full since then of course. But, BOA is reporting now that it went negative in 6/08 on all three credit reports, when originally they were reporting 11/06. It’s been frustrating to say the least. I’ve written every letter in the book to BOA and the credit bureau’s to get this removed, but nothing. I wanted to know was there anything else I could do.
liddy – I do have some actionable feedback to offer, but want to be sure I understand what happened clearly.
It sounds like the first time you missed a payment to BofA was in November of 2006. What exactly happened after that? And how was the account ultimately paid off? What was the date of that final pay off? Did that payoff go direct to Bank of America, or to a debt collector?
Michael,
Here’s another question for you. What are your thoughts on the use of of a “pay for deletion” strategy with collectors? I have various small collection debts on my record that I’d love to get removed…(otherwise, they would all fall off within the next 2 years).
Not sure how much motivation they would have to delete, for example, an $86, 5-year old debt in exchange for full payment. I know I’d need the agreement in writing before paying.
Thank you.
Robert – Pay for deletion strategies are hyped up a bit on the internet, but they are just not that common. If you have small bills like the 89 dollar one that you are prepared to pay in full to resolve, there is not much harm in trying, but larger balances you are trying to get a reduced pay off for I would not encourage. You would be telegraphing an outcome you are after that can mean paying more for the settlement, or not succeeding with one at all.
Add to that the fact that pay for delete is just not going to work with credit card issuers, or large debt collectors and debt buyers that see credit reporting agencies as partners in their overall efforts.
Michael,
I have a charged off credit card that was originally with Capital One, but then was sold to Midland Funding. On 15 Nov 13, I paid off the account and should get a zero balance letter from them this coming week. Once I get it, what updates can I request from the credit reporting agencies in order to minimize their impact on my score?
– Capital One is currently reporting: a $0 balance
Pay Status: Charged Off; Last payment made in May 2008
– Midland Funding is currently reporting: a $193 balance
Pay Status: In Collection; Last payment made in Oct 2013
Thank you.
Robert.
Robert – Nothing should change with the capital one charge off reporting. If you agreed to pay off or settle for less with Midland Funding LLC, than look at your report again in the next 10 to 60 days to verify that the balance being reported as owed is updated to show zero.
Look at your credit reports again around mid to late 2015 to make sure that both the original creditor and the debt buyers negative reporting were removed.
**That was NY State Tax Dept**
Michael,
All public record entries were made in the state of New York. I spent a long time today trying to validate these items with their county/city clerk, NY State Dept, and even an attorney’s office. All indications are that they have the wrong guy in all three cases. I went ahead and disputed the three public records with TransUnion (via online) and will do the same with Experian later today.
The charged-off Bank of America account is actually still with them. Another account that I originally had with with Merrick Bank ($900, also charged off) was sold to DENOVU. I’m working with Freedom Financial to work out a settlement plan that takes care of both accounts, as well as the $12K I have on line-of-credit debt :(.
Can you tell me what the impact of having the three pubic records removed from my credit report would be? I currently have a very poor 561, but hope that will help me bring it up a little ASAP. Thank you again.
Robert – I would generally recommend disputing credit reporting entries in writing. If you cannot get them to correct/delete what is obviously not yours, the written disputes (send certified mail return receipt requested), helps to lay a foundation for any actions you may want to take later. For now though, if you stick with the online dispute format, try to take screen shots of your dispute process, and keep a note book near by with time and dates of activities, names of people and places you spoke to etc.
Getting those public record items that are not yours removed will certainly help your credit long term (less negative items, lower DTI calculations for underwriting and the like), but the removal of those key derogatory and public record items will not lead to any meaningful increase in your credit score right now. Until you settle those unpaid collections with Bank of America that are yours, and that fact is updated to your credit reports, your score will remain depressed.
Is the LOC with Bank of America too?
The LOC was originally with Merrick Bank, now sold to Denovu. The debt settlement company told me that enrolling into their program will have a negative effect on my credit record initially, but should improve over time as the debt is paid off. I’m enrolling on a 42-month plan to pay around $14K of debt. They also said that the individual creditors will likely not update my account as being settled or paid until after I complete the entire 42-month program. Why can’t they make updates after their respective accounts are paid/settled?
Will settling these accounts refresh them on my records in a way that extends their stay on there? I hope not.
Thanks. Debt buyers and debt collectors typically do not update monthly payments like your original creditors do when you were making timely payments. If the settlements that Freedom Financial arranges rely on long term payments to a debt buyer, it is common for the account to be updated at the completion of those payments. Many settlement plans do actually knock one debt down at a time, and that may be the case for you. That would mean your credit reports would be updated periodically with a resolved collection account.
Settling these debts will not refresh the limitation for them to show on your credit reports. Just be sure you review your credit report about 60 days after you complete a settlement to verify the account is reflecting the new status. Also be sure you check your reports at about 7.5 years from the time you first missed payments to Bank of America or Merrick to verify that not only their charge off entries are gone, but also that all other collection entries that are related to the accounts are gone.
Michael,
After closer examination of my report, I find that there are actually four public records…Here’s what the three companies are reporting:
– Equifax: No public records on file
– Experian: Civil Claim for $7,158, entered on 10/8/10
– TransUnion: Civil Judgement for $1,140*, filed on 7/7/09; federal tax lien for $5,646, filed on 4/7/09; and a state tax lien for $7,961, filed in 5/21/09
*Plaintiff is Capital One. this one might be mine, but not sure.
I am baffled by the other items and cannot understand how they got into my file.
The BoA account was last paid 10/16/2008 and it was last updated on 04/27/2009.
Thank you.
Robert – Those credit report entries that are not yours can be disputed. Check out this guide for more details: https://blog.credit.com/2013/02/a-step-by-step-guide-to-disputing-credit-report-mistakes/.
Not knowing if Capital One sued you (if that is indeed your account), is a problem. That would indicate lack of, or improper service. Where is that judgment from, a court in New York, or Florida?
The credit card collection and charge off with Bank of America would fall off your credit report in 2 to 2.5-ish years. The SOL in Florida to legitimately sue for collection is 4 years. You are passed that. When you go to settle this you will be in the drivers seat. Who is it that is reporting a balance owed to them on the BofA account now?
Michael,
Thank you for your insight. I have two questions:
1. My credit report is showing three public records which do not sound familar at all. They were all filed in the State of New York and appear as a federal tax lien, a state tax lien, and a civil judgement. I have never lived in the state of New York nor have I been notified of any lawsuits. In addition, I have filed my taxes and received a refund every year without the IRS withholding any funds because of these liens/judgement. I’m a resident of the State of Florida, which has no state state tax. My dad has the same first and last name as I have and he resides in New York (he”s a business owner). Is there a chance that our records may have been mixed up and that these are his debts?
2. I have a charged-off BoA credit card that was sold and now appears as two separate entries. I’m looking to settle the debt and was wondering when I should expect to have both entries removed from my record? Also, are both entries currently affecting my records?
Robert – It does indeed sound like you have a mixed file issue with one or more credit reporting bureaus. Do you have the same issues with all three agencies (Equifax, TransUnion, and Experian)?
Is the charge off credit reporting entry from BofA reflecting a zero balance owed? If it is zeroed, and the other entry for the same account shows a balance due, than you would be dealing with a debt buyer when you settle. The debt buyer will have no control over how BofA reports the charge off. The debt buyer will likely not remove any negative credit reporting, but is required to report only accurate and current information. When you settle with them, the account should get updated to show a zero balance owed. This will help you improve your credit over time.
When did you last make a payment to BofA on this credit card? That will determine when both negative credit reporting items will age off of the credit reports.
Question… been settling debt for a couple years now and have become accustomed to the 1099C’s and the filing. Last year recieved 2 for cards that were not settled, but the creditor decided to issue 1099C’s and simply write the amounts off.
Now, recently pulled my credit report and have a BOA card that says “Account Charged off / $X written off / $X past due, which is the same language that is listed on the 2 cards that I received 1099C’s on. However, I have not received a 1099C from BOA for this account (which the last report date on the report was 2/12). Is there a way to find out if a 1099C will be coming this year or if it is simply in someone eles’ hands?
Also, what are the ruls for the SOL if you move to a different state? Does the card follow the same SOL as the state inwhich the account became charged off in or does the SOL roll into the new SOL for the state I move?
I ask because the SOL here is 3 years which would mean 7/14 the SOL is reached but the state I am moving has a SOL of 6 years.
Greately appreciate any help in understanding what I can expect.
Paul – Charge off accounts will show pretty much the same thing in the credit report whether a 1099c is issued are not. Nothing about a debt owner forgiving debt and sending the IRS a 1099c shows up in credit reports.
I do not know of any way to contact Bank of America about whether they will issue a 1099. You may never receive one. Does the BofA credit report entry still show a balance owed to them?
You should speak with an attorney experienced in debt collection defense in the state you are moving to about the SOL implications. Generally, the SOL in the state you reside will be the test, because that is most often where a legitimate collection lawsuit would be filed. That said, there are nuanced ways you can use the SOL of a different state in defense of a suit.
Hi Michael, You are a breath of fresh air on this topic. The internet is just information overload. If you don’t mind reading my circumstance, I would greatly appricate it. My boyfriend had a BofA credit card that was charged off back in 2010. Based on his credit report, it appears his debt has been sold twice and now lies with a company called CACH, LLC. They have not contacted him, but he would like to take care of this debt once and for all. My question is, how do we start this process of settling/nogotiation/whatever you want to call it when they have not contacted him? Do you recommend that we start by writing a letter requesting validation of the debt? We are not on a time frame (i.e. not buying a house, not buying a car, not seeking a loan for anything). I have found several resources out there for sample debt validation letters, but they are all responses to the collector making first contact. After reading the posts above, I’m not even sure that is a good first step. Maybe calling them directly would be better? I know that there is probably nothing that can be done with the BofA charge off on his credit report, but if he can get this CACH company to state that they were “paid in full” or whatever the magic words are, that’s still better than nothing, right? Overwhelmed…I appreciate any insight you have.
Thanks for appreciating the site CO Gal.
If settling the BofA account with Cach LLC is the goal, sending a request for validation (at least at this point), would not serve a purpose. Making a call to Cach and starting the conversation with something like – “I fell on some tough times a couple years back due to the recession. I am not all that better off today, but I finally wound up talking to some family about my finances, and they encouraged me to look at what it is going to take to pull the pieces back together, or if I should just get a fresh start with bankruptcy. I cannot afford much, but I am curious to know what I could settle this account for. If it is doable, I could make an effort to raise the money” – or something like that.
With the account charged off by Bank of America already, getting the Cach credit report trade line updated to paid in full, or paid for less, is not of much/any consequence. Getting it to show a zero balance owed is the main thing, and they have to update any credit reporting to show accurately.
How much is the balance showing as owed currently?
What state are you in?
The balance is a tad over $11,000. The state he was living in when the debt was incurred was Illinois. Now, he lives in TX. Not sure if it makes a difference or not.
Is it possible that if he calls them and they agree over the phone to settle for less than the full amount, that they’ll turn around and send him a letter telling him they are suing him. The general gist of everything I’ve read says that you can’t trust these people at all and beyond that, they are devious and will even lie to you. I’ve even read stories of people calling them and thinking they had initiated things only to receive a letter saying they were being sued! Everyone’s circumstances are different, but that terrifies me!
In regard to the validation, I read somewhere else on the internet that even if you are pretty sure the debt is legit, that often times these kinds of companies don’t have the proper paperwork to validate it. From my reading, I think that Cach is “Junk Debt” collector…I’m guessing you’ve heard of them. I even read an article (https://www.creditlaw.com/debt-collection-methods/bank-of-america-and-cach-llc-involved-in-suspicious-debt-collections-happenings/ ) that talks specifically about these two companies during the time my boyfriend’s debt was charged off. If Cach cannot validate the debt, then my boyfriend has no obligation to them, right? They would then have to take the claim off of his credit entirely, right?
Again, your insight is immensely appreciated!
CO Gal – I would target roughly 40% of that balance as a settlement amount given the current info you have shared.
I asked about the state to determine the SOL for a legitimate collection suit to be filed. Texas is 4 years. You mentioned the debt charged off in 2010. Charge off on credit card debt will typically occur no later than 180 days of missed payments. The account may already be passed the SOL depending on when the last payment was made to BofA. I would want to know if the account is passed the SOL, and then would target a lower settlement percentage, or just let this go and wait for it to age off of the credit report in another 3 or so years (but it could prevent qualifying for certain loans due to a skewed DTI – like a home loan).
There is much spilled virtual ink about debt collection on the internet. I find most of it to be not all that useful. The post you linked to has information, but it really would only be helpful to know if Cach LLC sued on the debt. If that were to happen, there are strategies to deal with it, and some really great resources to connect with in Texas. Let me know if that happens.
There are debt collectors and debt buyers that you absolutely should be careful dealing with. Cach, in my opinion, is one of them. But some of the accounts Cach places out for collection land with collectors that do not play games, and are just as interested as you are in working something out. I could not comment further without knowing who the account is with. Here is some more info about Cach: https://consumerrecoverynetwork.com/question/debt-collector-michael-sipes-cach-llc/
As far as obligation for the debt goes – Bank of America legitimately sells and/or transfers legal rights to accounts they charge off. It is normal. There is a tendency for some to take a position that they are no longer obligated to pay, or owe the debt, when it is sold. That is not true. The debt does not go away. But if someone cannot, or will not pay it, the debt will eventually cross over the SOL to be sued, followed by the 7 to 7.5 year SOL for it to fall of the credit report.
You can dispute the credit report entry from Cach LLC directly with the credit reporting agencies. But I would not try that unless the SOL to be sued has passed. I do not think you will be successful in getting it removed (debt validation of a legitimate debt, and credit reporting disputes are different things).