Chargeoff Not a Chargeoff

[Anonymous]

In my case, the CO clearly misrepresents the condition of the debt.  But, nothing I can do about it.  Hey, thanks for taking the time to respond.

[RobertEG]

The fact of a prior CO does not necessarily misrepresent the current status of debt.

As has been stated, taking a CO is simply a bookeeping measure taken by a creditor at a point in time where they consider the debt to have become "uncollectible."

That does not mean that the debt is gone, or that they cannot continue to collect on it.  It is just a perception at that point in time that permits them to shift the debt from a receivable asset on their books to a business loss.  They cannot just do a CO anytime they want.  The IRS has regulations, which usually includes the debt to have reached a certain delinqueuncy, such as 120 late, before they can consider the debt as "uncollectible."  Some institutions, such as banks, are under a statutory requirement to do a CO after certain levels of delinquency in order to prevent them from over-stating their assets, so a CO on their part may have actually been required.

Should the consumer then make payments, it is a new ball game.  The creditor must then deal with receipt of the payments in their bookeeping by now reporting the payments as a received asset.  That is their problem and business.  It does not alter the fact of their having taken the prior business decision.

If payments are resumed, the CO will remain of record, but the current status will be updated to reflect the new status.

[Anonymous]

I hear ya, but I'm a retired accountant and internal and external treatment of a loan are two different things.  Under the matching principle, when the payments were resumed, the loan had to be returned to a current status from a chargeoff status.  The bank refuses to change the status of the loan from a CO, and that is is just plain vindictive.  But we've all come to expect poor treatment by banks.  This loan is with my credit union of 12 years, and their behavior in this matter is extraordinary.

[RobertEG]

Current status is just a snapshot of.... current status.  Current status is a mix of delinquency status and payment status.  When the CO was simply unpaid, the current status would reflect the account delinquency status.  When payments were made, the current status would now reflect the addition of payment information.

Yes, if payments have resumed, you have clear basis for having the current status updated.  I would file a direct dispute with the creditor for inaccurate reporting of the current status.

If they update the current status, which I agree would be required to correctly reflect its current status, the CO would then be retained under your Payment Rating code, which reflects the highest level of delinquency status prior to its current status.  It shifts the reporting deck chairs, and does not remove the prior reporting of the CO.

Just where its reporting is retained.

[Anonymous]

Hence, the purpose of my post.  CU refuses to update the status.  I disputed it, but CRAs say only CU can change it.  They won't.  Been trying for 5 years.  Stil showing as a CO, even though CU's records show all payments current.

[RobertEG]

ARe you POSITIVE that they are reporting CO as the current status, or is your CR simply continuing to show the CO as a result of its continued presence under other codes, such a payment rating?

If dispute verificatiion has been provided and you still feel their reporting is inaccurate, your remedy is either to file a complaint with the FTC, or to bring civil action, compelling the production of evidence and getting resolution by a judge.  The dispute process does not require the production of evidence, and thus is not the ultimate recourse for requiring correction.

In the end, I see no basis for compelling deletion of the CO itself, as it apparently was charged-off.  I personally would not pursue legal action simply to get the coding corrected from current status to payment rating. 

[Anonymous]

All 3 reports show "Chargeoff".  Let me clarify something for you non-accountants.  "Chargeoff" is not an accounting term.  There is no such term in the Accounting lexcon.  I think you're confusing "Chargeoff" with "Write-off".  Accountants write off bad debt when it is deemed uncollectible.  A "Chargeoff" is a credit report term which means uncollectible.  If an account is current with all payments made, it is no longer "Uncollectible".

30, 60, 90 or even 120 days late is not the same as a "Chargeoff".  "Chargeoff" means you stopped paying, period and never made any further payments.  To report a current account that was 60 days late once as a "Chargeoff" is blatant false credit reporting.  Period.  The reader of a credit report sees "Chargeoff: only one way.....complete failure to pay.  It is a misrepresentation of the true status of the account.

I'll write the FTC.