Posted on: 24th Nov, 2005 12:39pm
When you're unable to pay off a debt, the creditor may issue a credit charge off. A charge off doesn't mean that the debt is cancelled or forgiven. It's not that you no longer owe the debt. Credit charge off implies that the unpaid debt will be reported as the creditor's loss when he uses accounting methods for tax purposes.
The creditor may feel that he cannot collect the debt from you; he may write off the account as a bad debt. But he doesn't lose the right to collect the debt. And, even if the creditor does not try to collect an unsecured debt (like credit card, personal loan, etc), he may sell it off to a collection agency (CA), which will then set off to collect the debt.
The creditor may feel that he cannot collect the debt from you; he may write off the account as a bad debt. But he doesn't lose the right to collect the debt. And, even if the creditor does not try to collect an unsecured debt (like credit card, personal loan, etc), he may sell it off to a collection agency (CA), which will then set off to collect the debt.
How to remove charge off from credit report
Usually credit charge off occurs when payments aren't made for more than 6 months. And, it does have a negative impact on your credit report as it stays on the report for 7 years and 180 days from the date of first non-payment of debt. So, what you need to do is, negotiate with the collection agency and try to remove the charge-off from your credit report.
If the creditor has charged off your loan recently, then request him to pull back the debt from the collection agency. Explain that you wish to deal with the creditor directly. Once the debt is pulled back, you can negotiate with creditor to settle the debt for as much as you can pay. You should also negotiate a pay for delete agreement such that even though you don't pay mortgage balance in full, the lender would communicate with the bureaus and have all information on the account removed from your report. If the creditor doesn't want a pay for delete agreement, then request him to update your account status as "Paid charge off".
However if you try to settle the debt by making a partial payment, then the creditor may report it as "Settled Charge off". A "Paid" or "Settled" charge off on a mortgage debt helps to remove the lien from the house title.
If the creditor has charged off your loan recently, then request him to pull back the debt from the collection agency. Explain that you wish to deal with the creditor directly. Once the debt is pulled back, you can negotiate with creditor to settle the debt for as much as you can pay. You should also negotiate a pay for delete agreement such that even though you don't pay mortgage balance in full, the lender would communicate with the bureaus and have all information on the account removed from your report. If the creditor doesn't want a pay for delete agreement, then request him to update your account status as "Paid charge off".
However if you try to settle the debt by making a partial payment, then the creditor may report it as "Settled Charge off". A "Paid" or "Settled" charge off on a mortgage debt helps to remove the lien from the house title.
SOL and credit charge off
As long as the SOL (Statute of Limitations) period exists, the creditor/collection agency can file a lawsuit against you and try to retrieve the unpaid debt, even after charge off. But after the SOL period (4 to 6 years, varies from state to state) expires, there'll be no lawsuit against you but the creditor or collection agency still has the right to collect from you. However, if debtors make a written promise to pay off the debt or make partial payment after the SOL expires, then in many states, the SOL starts over again.
If you have a charge off on your credit report and wish to get a mortgage, the lender would expect you to pay it off and then go for the mortgage. This is because a mortgage charge off implies there is still a lien existing against the title and the lien can only be removed once it is paid off.
If you have a charge off on your credit report and wish to get a mortgage, the lender would expect you to pay it off and then go for the mortgage. This is because a mortgage charge off implies there is still a lien existing against the title and the lien can only be removed once it is paid off.
Can I get some information on Charge Offs?
Hi,
Edward pointed it out correctly.
The loan company charged off as there must have been long delay in the payments and the debt was written off as uncollectible and they stopped spending time and attorney expenses for collecting the same.
But this fact does not mean that you as a co-signer do not still have the loan liability and now the uncollected amount of debt was sold to a collection agency and they have contacted you for the remaining amount.
Colin
Edward pointed it out correctly.
The loan company charged off as there must have been long delay in the payments and the debt was written off as uncollectible and they stopped spending time and attorney expenses for collecting the same.
But this fact does not mean that you as a co-signer do not still have the loan liability and now the uncollected amount of debt was sold to a collection agency and they have contacted you for the remaining amount.
Colin
Hi Blaze,
It can be either the collection agency trying to retrieve the unpaid loan balance from you. Or else, it can be the auto loan servicing company who has taken the responsibility of collecting payments from the borrower. That is, it is quite possible that your loan company has sold the servicing rights to another company.
But as far as I know, once the car is repossessed, there should not be any collection of payments.
Thanks,
Sara.
It can be either the collection agency trying to retrieve the unpaid loan balance from you. Or else, it can be the auto loan servicing company who has taken the responsibility of collecting payments from the borrower. That is, it is quite possible that your loan company has sold the servicing rights to another company.
But as far as I know, once the car is repossessed, there should not be any collection of payments.
Thanks,
Sara.
Hi Blaze,
State laws vary as far as car repossession is concerned. Some states allow the creditor to repossess the car legally without going to court or warning the borrower in advance. The creditor may also sell the contract to a third party, the assignee, who has the same rights as the original creditor.
But the possibility of repossession should be specified in the loan contract for which you have cosigned. And, as per the terms and conditions in the contract, the borrower may have to pay additional money to the creditor to cover the cost of repossession (especially the costs of selling) and of the depreciated value of the car as it has already been used by him. But if the borrower does not pay, then being a cosigner, you will have to make the payments.
If the contract does not mention repossession, do ask the borrower to contact an attorney for further advice and if it already mentions, then either he or you will have to pay.
God bless you
For MortgageFit,
Samantha.
State laws vary as far as car repossession is concerned. Some states allow the creditor to repossess the car legally without going to court or warning the borrower in advance. The creditor may also sell the contract to a third party, the assignee, who has the same rights as the original creditor.
But the possibility of repossession should be specified in the loan contract for which you have cosigned. And, as per the terms and conditions in the contract, the borrower may have to pay additional money to the creditor to cover the cost of repossession (especially the costs of selling) and of the depreciated value of the car as it has already been used by him. But if the borrower does not pay, then being a cosigner, you will have to make the payments.
If the contract does not mention repossession, do ask the borrower to contact an attorney for further advice and if it already mentions, then either he or you will have to pay.
God bless you
For MortgageFit,
Samantha.
my creditor charged off my account back in 2002,but the creditor is still
reporting a charge off as follows:charge off as of nov 2005 sep 2005,aug 2005,jun 2005,may 2005,mar 2005,feb 2005,dec 2004,feb 2002 to nov 2004.these delinquency were reported in my january 2006 credit report.
can the creditor do this after the account has been chared off?
reporting a charge off as follows:charge off as of nov 2005 sep 2005,aug 2005,jun 2005,may 2005,mar 2005,feb 2005,dec 2004,feb 2002 to nov 2004.these delinquency were reported in my january 2006 credit report.
can the creditor do this after the account has been chared off?
Hi,
A charge off is done by a creditor when there is non payment for more than 180 days. But you still owe the debt. Charge off is normally a procedure of accounting in creditors part where any uncollectable debt is reported for tax purposes as loss.
The charge off does show on your credit report for seven years after your first non-payment.
Thanks
Colin
A charge off is done by a creditor when there is non payment for more than 180 days. But you still owe the debt. Charge off is normally a procedure of accounting in creditors part where any uncollectable debt is reported for tax purposes as loss.
The charge off does show on your credit report for seven years after your first non-payment.
Thanks
Colin
now the bank has chrged off the account and has given it to nes which is a collection agency. They say that if I don't pay the full amount they are going to sue and collect property. can the collection agency do this? or with they know turn it over to a lawyer. and what property?
Shelley, depending on which state you are in if the SOL period has elapsed then they cannot get a judgment against you.
how do I find out what the sol period is for kentucky?
Hi Steichen,
Welcome to the forums.
Statute of Limitations (the legal time limit after which debt collection expires) varies from one state to another. Most unsecured debts expire within 4 to 6 months after the debtor defaults. But debts like federal student loans and state and federal taxes never expire.
Thanks,
Sara
Welcome to the forums.
Statute of Limitations (the legal time limit after which debt collection expires) varies from one state to another. Most unsecured debts expire within 4 to 6 months after the debtor defaults. But debts like federal student loans and state and federal taxes never expire.
Thanks,
Sara
Steichen,
Statute of Limitations for judgments could be as long as 20 years.
Statute of Limitations for judgments could be as long as 20 years.
I HAVE A LIEN ON MY PROPERTY. MY CREDIT REPORT SHOW THAT THE DEBT WAS SATISFIED (2002). HOWEVER, THE LIEN WAS NOT REMOVED
Hi LINLIN.
Welcome to the forum.
Have you paid off the lien? If you have not taken any proof that you have paid it off?
See if you have not paid the lien then pay it off and ask them to release certificate. But if you have paid it off or don't recognize the debt then you can send them a debt validation letter.
Feel free to ask if you have any further questions.
Best of luck.
Larry
Welcome to the forum.
Have you paid off the lien? If you have not taken any proof that you have paid it off?
See if you have not paid the lien then pay it off and ask them to release certificate. But if you have paid it off or don't recognize the debt then you can send them a debt validation letter.
Feel free to ask if you have any further questions.
Best of luck.
Larry
Have any of you had success in getting charge-offs removed from your credit report by Credit Repair agencies?.... I'm giving it a try right now.
I'm not sure if contacting the collection agency is the right approach, I would think things would only get worse... They would require all updated information about you + run a new inquiry on your report.
Nick
I'm not sure if contacting the collection agency is the right approach, I would think things would only get worse... They would require all updated information about you + run a new inquiry on your report.
Nick
Welcome Nykolos.
I feel credit repair agencies are not too good. Charge off doesn't mean that the loan is forgiven, So if you can pay it off. By the way how old is the debt?
I feel credit repair agencies are not too good. Charge off doesn't mean that the loan is forgiven, So if you can pay it off. By the way how old is the debt?
is it possible to secure a mortgage (fha loan) with a low credit score I have several brokers telling me that even though I have a low score if i paid off two credit cards with balances of 300 dollars on each that they could get me rescored rapidly and get my loan approved. Now my concern is that possible or should I run like the wind?