Posted on: 24th Dec, 2009 05:59 am
My husband received a letter in the mail for a car loan he had back in 1996. He could not make the payments at that time, so he gave the car company back the vechicle. The loan was charged off in 1997 by the car company, but we just received a collection notice from vital recovery services advising he still owes this balance. How can they try and collect on a debit that has been in a charge off status for about 12 years now? Is this legal? Do we have to pay this balance?
If it was charges off...then the creditor is not expecting payment. Maybe the collection agency is looking to pocket everything they collect in this case.
how do we handle this dispute with the collection agency? we should not have to pay for a charge off that was actually charged off in 1997. Can someone advise me of the law in this case?
There are statues of limitations (SOL) in this case. You need to check out your state laws regarding SOL to know whether or not you need to actually pay for the charge off.
The SOL expired a while back. Do not pay a penny. Ignore them or tell them to eat crap. They have no recourse against you. The problem now is they bought this loan as part of a portfolio of loans. They will go through their process to collect. You will ignore them. Then they will eventually charge it off again and report it to the credit agencies. Or they will hold it for a while and resell it to somebody else.
The financial industry is so screwed up beyond recognition. A good military term would be FUBAR. There are no regulations and nobody is monitoring them. With all the bad loans they have now they have gone into a feeding frenzy in selling and buying portfolios of loans without doing their due diligence hoping to make a buck. Buying portfolios of loan on pennies on the dollar and collecting on some is big bucks.
This is an area our beloved incompetent government has ignored and is doing nothing about.
The financial industry is so screwed up beyond recognition. A good military term would be FUBAR. There are no regulations and nobody is monitoring them. With all the bad loans they have now they have gone into a feeding frenzy in selling and buying portfolios of loans without doing their due diligence hoping to make a buck. Buying portfolios of loan on pennies on the dollar and collecting on some is big bucks.
This is an area our beloved incompetent government has ignored and is doing nothing about.
safemba is correct. Unless it's a lien or judgement..you have little to worry about
Google bad loan selling and you will find very interesting material on the internet that describes in detail what happens to charge offs and bad loans.
It appears that unless you pay it off entirely it will be sold and resold forever.
Even if you pay part of it they will sell the balance you owe to somebody.
Buying and selling bad loans has become very sophisticated. Computer modeling is used, foreward contracts, insurance and financing is available for portfolios of bad loans.
There are thousands of people out there making big bucks on this.
With the present economic situation they will be making more money.
Are there any regulations for these sophisticated processes?
Probably NOT. Bad loans are now part of special purpose financial vehicles such as securitization, derivatives, etc
It appears that unless you pay it off entirely it will be sold and resold forever.
Even if you pay part of it they will sell the balance you owe to somebody.
Buying and selling bad loans has become very sophisticated. Computer modeling is used, foreward contracts, insurance and financing is available for portfolios of bad loans.
There are thousands of people out there making big bucks on this.
With the present economic situation they will be making more money.
Are there any regulations for these sophisticated processes?
Probably NOT. Bad loans are now part of special purpose financial vehicles such as securitization, derivatives, etc
semefa,
So what you're saying is that a charge-off can stay in your credit forever? since the loan can be resold and resold, the new company will charge it of again, and so on. it doesn't seem fair, or even legal, but is that the case?
So what you're saying is that a charge-off can stay in your credit forever? since the loan can be resold and resold, the new company will charge it of again, and so on. it doesn't seem fair, or even legal, but is that the case?
semefa,
So what you're saying is that a charge-off can stay in your credit forever? since the loan can be resold and resold, the new company will charge it of again, and so on. it doesn't seem fair, or even legal, but is that the case?
So what you're saying is that a charge-off can stay in your credit forever? since the loan can be resold and resold, the new company will charge it of again, and so on. it doesn't seem fair, or even legal, but is that the case?
Hi Ale,
I believe that a charge-off signifies that you still owe the debt. So if you owe a debt, and if you don't pay it then the creditor/collection agency can charge it off again.
I believe that a charge-off signifies that you still owe the debt. So if you owe a debt, and if you don't pay it then the creditor/collection agency can charge it off again.
a chargeoff/collection can only stay for 7years by federal law on your credit report unless it's a judgement or lien
Hi,
Whether or not geegee and her husband owes the debt also depends on the SOL. So it's better to check out the SOL according to the state.
Whether or not geegee and her husband owes the debt also depends on the SOL. So it's better to check out the SOL according to the state.