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?
oh yeah....and handling gavels, too.
The plot thickens. The gentleman helping me at this bank has now informed me that the "compliance" department has sent us a 1099C on yesterday's date! (03/02/20) The amount is for just over $13,000. We filed our taxes just this week and I am wondering if this is a legal action on their part as we did not receive it before 01/31/10. This is getting stranger and stranger! Fortunately, I do have an understanding ear at this bank and I do feel like he hears me. I am shocked by their actions and now have an address for Thrift Supervision in Chicago, IL.
that date is 03/03/10!
glad you clarified that...i wouldn't be too worried about something that's dated 10 years in the future, after all.
let's face it...not all lenders are "the best and the brightest."
let's face it...not all lenders are "the best and the brightest."
i have file and discharged chapter 7 bankruptcy. my credit report is littered with charge offs. i thought the bankruptcy would remove them. can i et then removed, and how?
I have file and discharged chapter 7 bankruptcy. My credit report is littered with charge offs. I thought the bankruptcy would remove them. Can I et then removed, and how?
It doesnt remove the items
the credit items should say INCLUDED IN BANKRUPTCY under each tradeline
Make sure they do this so the tradeline becomes UNRATED
the credit items should say INCLUDED IN BANKRUPTCY under each tradeline
Make sure they do this so the tradeline becomes UNRATED
I just had my credit pulled for a mortgage loan, with xpn i could get approved but efx and tu are alot lower. I have a charge off for a credit card it will be paid off in a week. I wanna get it removed to boost my credit score is it possible? Or at least have it say paid will that boost my score? :evil:
it is possible
make sure you negotiate that with them by doing a pay for deletion
if you pay it and they just update it...then your score can drop even lower AND it may appear on XPN
Speak to the lender ot make sure it's absolutely necessary to pay that collection
make sure you negotiate that with them by doing a pay for deletion
if you pay it and they just update it...then your score can drop even lower AND it may appear on XPN
Speak to the lender ot make sure it's absolutely necessary to pay that collection
When you call up your credit card company, and ask them to take less than you owe what happens is they charge off the rest. It does go against your credit. Even though they have agreed to a lesser amount the rest is considered a write off, and they will report it to the credit bureau.
Good luck
Good luck
cagebird, what we are speaking about here is already a charged off account. what will occur is that the creditor will reflect that the account was "settled" at less than 100%. if, as eric described above, the creditor is willing to a deletion, that means that the whole ugly incident will disappear completely.
Mr. Akerley I am back! The bank is aware that they have violated the Fair and Accurate Reporting Act #1681 and they are blowing it off due to the "changes" due to short sales. That said, another interesting little tidbit for your short sale persons who are willing to negociate with the bank and sign an unsecured note. This bank which we are paying 2/3's back with a 20 year note has been very deceitful. They will not be reporting this note to the CRS's. My research has indicated that "collection" agencies will not give you credit when you are paying them back. I am wondering how this letter of approval and this promissory note which we signed in good faith has now become "collection". It makes sense, but why didn't the bank let us know what they would be doing? I thought we were negotiating in good faith for the repayment of this loan, and the bank is refusing to give us credit for doing the right thing in paying them back. Doesn't it seem that if we signed a promissory note, (with no mention of collection on it), that the bank would have to treat is as an unsecured note? There is nothing that would have alerted me to this banking behavior when we signed the note as I have worked in the banking industry and am familiar with unsecured notes. It is still blowing my mind that if we had signed a promissory note for the full amount owed with interest, the bank would still have given us ZERO credit for paying them back! Please help if you have any remedies. At this point in time I regret signing the note and my advice to anyone involved in negotiations during a short sale is to be extremely careful because the banks are not being honest and ethical. If you have any information or web sites involving short sales and unsecured notes, please forward them to me. I have reviewed my short sale documents and the only thing that mentions collections is on the letter of approval when the person who signed put their title as "Collections". I had no idea that we would be in collections because we were signing a note out of good faith and the desire to pay the lender back. Thank you again!
That is CRA's not CRS's!
Sabrina, welcome back and thanks for the update. I don't have any experience in this area of lending/banking/finance/collections/you name it, and I'm sure the overwhelming majority of us here haven't been down that road (those roads) either. Short sales, though they've been around for a long time, are far more prevalent than in any previous recollected time, so the circumstances surrounding them and the methods by which lenders are able to recoup their losses are probably being created on the fly.
That being said, I understand your frustration in only now learning of this being a collection, and I have to commiserate with you, particularly since the signing of a promissory note wasn't disclosed to you as a collections tool. It's pretty easy to see that you'd have expected this to be merely an unsecured loan, and therefore reportable to the credit repositories.
I don't know what form of negotiation you might be able to enter into that would change the format or terminology of this note on the lender's end, but it's certainly worth your trouble to seek it out.
On a good note, I suppose, is that you have the right as a consumer, to enter your own comments into your credit record with all the agencies. Do lenders actually read these comments and take them to heart? That's a hard question to answer...for me, when I was an underwriter (trying to get back to that again now!), I'd certainly read them but most were inconsequential when it came down to how I was viewing a loan. Regrettably, there's no schooling done for those who'd add comments to their own credit records, so the language didn't always make sense, nor did it serve much of a purpose in those that I read for the most part.
By all means, you ought to investigate further, to see if there's a way you can turn this collection into an unsecured installment loan. Regulatory agencies might be worth discussing this with, in addition to the bank; maybe even your state's Attorney General's office or Banking Commission.
This is obviously painful to you. You've tried to do "the right thing" and it seems you're only being penalized for so doing.
That being said, I understand your frustration in only now learning of this being a collection, and I have to commiserate with you, particularly since the signing of a promissory note wasn't disclosed to you as a collections tool. It's pretty easy to see that you'd have expected this to be merely an unsecured loan, and therefore reportable to the credit repositories.
I don't know what form of negotiation you might be able to enter into that would change the format or terminology of this note on the lender's end, but it's certainly worth your trouble to seek it out.
On a good note, I suppose, is that you have the right as a consumer, to enter your own comments into your credit record with all the agencies. Do lenders actually read these comments and take them to heart? That's a hard question to answer...for me, when I was an underwriter (trying to get back to that again now!), I'd certainly read them but most were inconsequential when it came down to how I was viewing a loan. Regrettably, there's no schooling done for those who'd add comments to their own credit records, so the language didn't always make sense, nor did it serve much of a purpose in those that I read for the most part.
By all means, you ought to investigate further, to see if there's a way you can turn this collection into an unsecured installment loan. Regulatory agencies might be worth discussing this with, in addition to the bank; maybe even your state's Attorney General's office or Banking Commission.
This is obviously painful to you. You've tried to do "the right thing" and it seems you're only being penalized for so doing.
we started a bankruptcy but requested it be dismissed but still volluntarily surrendered a boat. The bank claims we owe 21,000 and have agreed to a monthly payment of $100.00 but they continue to report the loan as CO and late. What is our best option?