General Credit Topics

[Bradleyj]

I purchased a motorcycle in 2006 and up until 2008 made payments as agreed. I lost my job and fell way behind, long story short I haven't paid a payment since February of 2008. I recently bought a house and the lender mentioned nothing of the debt on my credit report. I recently pulled my credit report and it shows that the balance is $0 and the pay status as account paid in full; was a charge-off, although I have not paid the debt. What does this mean? Am I able to get the title?

[RobertEG]

If the OC sold the bad debt, they were required to report $0 balance, so that alone does not indicate satisfaction of the debt.

However, update of the status to paid if the debt was not paid is confusing.

When reviewing your CR, it would tell the reader that the debt was paid to the OC, so I am not surprised that your mortgage lendor did not question the account.

Whether you can secure title depends upon the answer to the question... why did the creditor report as paid if you did not satisfy the debt?

The lien is probably still showing on the title, and to get it released would require contact with the creditor. 

Perhaps they simplly cancelled the remaining debt, but if they had done so, and the excused amount was $600 or more, you should have received an IRS form 1099c, reporting that cancelled debt to the IRS, and thus informing them of your tax liability.

You will most likely need to ask the creditor to remove the lien, and see how they respond.  Something happened that is not evident from their credit reporting alone.

[Bradleyj]

I forgot to say that the IRS did send me a statement stating of an owed tax amount related to the motorcycle, but never received any form from the creditor, so with that said does that mean they just cancelled the debt? And also allow me to get the title?