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?
Though your loan has been charged off, you're still responsible for the payments. However, this time you will have to make the payment to the collection agency. However, if the statute of limitations is up, then the CA won't be able to take any legal actions against you in order to recover the debts.
I have a charge off from citi and they sent a 1099 C to IRS,I was in a collection company,HALO and there was no deal except I got letter and 1099C jan 2012 and they cancelled account 12/01/2011.what now Halo playing dumb? tks
stated above,tks
Hi george,
Your query is not very clear to me. Is the collection agency charging you again for the debts?
Your query is not very clear to me. Is the collection agency charging you again for the debts?
What does this mean, I have been reading I understand I still owe the debt, But Can they foreclose on my property if it has been charged off as bad debt? I live in Florida, They sent me a letter saying they would accept 30% of balance.. To bad I'm disabled and don't even have 30%. I still live here can they take my house IF it has been charged off as bad debt?
Hi Ionoone,
Your query has been replied to in the given page: http://www.mortgagefit.com/Mortgage-problems/Mortgage-charged-off-Foreclosure-question.html . Please take a look at it. I hope it will help you.
Thanks,
Jerry
Your query has been replied to in the given page: http://www.mortgagefit.com/Mortgage-problems/Mortgage-charged-off-Foreclosure-question.html . Please take a look at it. I hope it will help you.
Thanks,
Jerry
im in process of trying to get home loan i had a few charge-off s on my prior credit report that have fallen off due to 71/2 time frame will that hinder my home loan process it is no longer on my credit report
Hi heathcliff,
If the charge offs have already fallen off your credit report, then it won't have a negative impact on your loan application.
Thanks
If the charge offs have already fallen off your credit report, then it won't have a negative impact on your loan application.
Thanks
I took out bankruptcy 3 yrs ago and included all of my credit cards, now on my credit reports one of the credit card companies is showing the account as a charge off, how do I get them to correct this? Also we have a vehicle that we voluntarily returned and the company show as $1200 charge off, we now know who bought it, if we can prove that they sold it for enough that they have no loss on it can we make them remove the charge off?
Hi ANDE!
Welcome to forums!
You should get in touch with the credit card company and ask them to update the status of the account in your credit report. If they don't take required actions, then you can contact the credit bureaus, give them the prove that the account has been discharged and ask them to update the status on your credit report.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
You should get in touch with the credit card company and ask them to update the status of the account in your credit report. If they don't take required actions, then you can contact the credit bureaus, give them the prove that the account has been discharged and ask them to update the status on your credit report.
Feel free to ask if you've further queries.
Sussane
SINCE A CREDITOR HAS AN ACCOUNT CHARGED OFF AS A LOSS, IS IT PERMITTABLE FOR THE ACCOUNT TO BE NEGOTIATED AND MAYBE COME TO AN AGREEABLE AMOUNT WITH THE CREDITOR AND THE CREDITOR REMOVESOR HAVE THE CREDIT BUREAUS REMOVE THE ACCOUNT OR SHOW IT IS IN GOOD STANDING AND PAID OFF?
Hi bayou,
What you are saying is possible. But it will be completely the discretion of the creditor whether or not he will consider your request and negotiate with you to remove the negative item from your credit report or report it in good standing.
Thanks
What you are saying is possible. But it will be completely the discretion of the creditor whether or not he will consider your request and negotiate with you to remove the negative item from your credit report or report it in good standing.
Thanks
I have a credit card that was in my name but used by someone else As a secondary to the card. I have moved around a lot with the military and have had several addresses. I have not had any contact with any credit card collection agencies. I just found out that the person who I got the card for has not made any payments for 4 years. They we're suppose to make the payments. I am not going to pay it due to being not my debt. I live in alaska. What are the rules with getting this removed from my credit report
Hi Alaska,
As the card is in your name, the negative information will remain mentioned in your credit report. You will have to make sure that the other person pays off the debt so that positive information gets reported in your credit report.
Thanks
As the card is in your name, the negative information will remain mentioned in your credit report. You will have to make sure that the other person pays off the debt so that positive information gets reported in your credit report.
Thanks