5 1/2 year old charge offs

[Anonymous]

Looking for some direction on what I can do about this. I have three creditors reporting monthly on three accounts that have been charged off since 2009. One originally charged of on 09/2009 and two others in 11/2009, all were being reported as CO up until 02/2012 when the creditors started reporting it monthly again. My understanding was that after it was charged off, the acount moved from the Adverse Accounts tab on the credit report to the collections portion of the report. Is there any way to stop the creditors from reporting on the accounts page, which is keeping my credit score from moving anywhere over the last 5 years, and have it transferred to the collections portion? I had employment issues in 2009 and had three other creditors that charged off accounts which then reported in collections but for some reason these havent. THX! 

[jeffeverde]

"Charged Off" is an accounting status.  It provides some immediate tax benefit to the OC - but it doesn't change the fact that it's a receivable that they own.   If it's showing as "Charged Off and Sold to another lender", then the OC can longer update the account.   But as long as they own the debt, they can continue report it as an ongoing delinquent.

The upside to this is that while the OC still owns the debt, there's a possibility of arriving at a settlement that includes removing the derogatory reporting from your credit report.  Once the OC sells the debt, the Charge Off remains on your report until 7 years from DoFD (date of first delinquency). 

Find out what the SOL is in your state ( statute of limitations for sueing to collect a debt - ranges from 4-6 years, depending on the state).   If you're outside of SOL, that gives you tremendous bargaining power to arrive at a settlement.  At the point that the lender cannot sue to collect, all they can do is nag you, and the debt is considered pretty much uncollectable (unless you're applying for a mortgage, there's not much to compel you to pay).   That being the case, most lenders will agree to a PFD (pay for deletion) - and often at a substantial discount of the original balance.

[pizzadude]

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@jeffeverde wrote:

"Charged Off" is an accounting status.  It provides some immediate tax benefit to the OC - but it doesn't change the fact that it's a receivable that they own.   If it's showing as "Charged Off and Sold to another lender", then the OC can longer update the account.   But as long as they own the debt, they can continue report it as an ongoing delinquent.

The upside to this is that while the OC still owns the debt, there's a possibility of arriving at a settlement that includes removing the derogatory reporting from your credit report.  Once the OC sells the debt, the Charge Off remains on your report until 7 years from DoFD (date of first delinquency). 

Find out what the SOL is in your state ( statute of limitations for sueing to collect a debt - ranges from 4-6 years, depending on the state).   If you're outside of SOL, that gives you tremendous bargaining power to arrive at a settlement.  At the point that the lender cannot sue to collect, all they can do is nag you, and the debt is considered pretty much uncollectable (unless you're applying for a mortgage, there's not much to compel you to pay).   That being the case, most lenders will agree to a PFD (pay for deletion) - and often at a substantial discount of the original balance.

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Unfortunately this is not the case, there are many examples where CAs have obtained default judgments on out of SOL debt.    SOL is your defence in court if you are sued for out of SOL debt.

[Shogun]

As long as the account is unpaid and within the CRTP they can update monthly, as they have chosen to do.  This is actually how the system is supposed to work.

[Anonymous]

Thanks for the info! Greatly appreciated. Im still wondering why these three picked up reporting again, after they stopped for 2 1/2 years. And why the other creditiors havent started reporting again like these three have. I also dont have any CA's from any of the cards that were charged off in 2009. Seems like they may have been too busy to try and collect or had bigger fish to fry. Ive also done a ton of research on this over the last 5 years and ive not read any posts from anyone having this same issue. Most have followed the CO to CA track so im just aggravated. The SOL in my state is 3 years and Im way beyond that. These are due to fall of in feb and march of 2016 so I guess I'll have to wait till then.

[Shogun]

Sometimes when you start to rebuild on your CR, it sets off Flags that the CRAs report to the OCs and the CAs which will trigger them to start collection activity again.  Have you done anything to trigger this?

[Anonymous]

No. Havent done anything other than pull my report on occasion. Just started doing that over the last 9 or 12 months though TU but they started reporting again 2 1/2 yrs ago. Ive read that once an account has charged off that thats kind of the apex of bad credit and that the farther away from the CO you get the better your score will get. Well my score isnt getting any better in fact its gone nowhere over the past year. IE my TU score has gone up 13 pts in a year. EX is the exact same and EQ is wayyy below 600. Based on other accounts Ive read my score should be far better than it is being 5 1/2 yrs past CO. I think that the monthly reporting is killing it and something doesnt seem right. Like I said, Ive not read any accounts of this happening to anyone else.  

[bdhu2001]

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@Anonymous wrote:

Thanks for the info! Greatly appreciated. Im still wondering why these three picked up reporting again, after they stopped for 2 1/2 years. And why the other creditiors havent started reporting again like these three have. I also dont have any CA's from any of the cards that were charged off in 2009. Seems like they may have been too busy to try and collect or had bigger fish to fry. Ive also done a ton of research on this over the last 5 years and ive not read any posts from anyone having this same issue. Most have followed the CO to CA track so im just aggravated. The SOL in my state is 3 years and Im way beyond that. These are due to fall of in feb and march of 2016 so I guess I'll have to wait till then.

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Since you're beyond the SOL, if the amounts are too large, you can also do PFD or bargain for a settlement PFD.  They know it's beyond the SOL so many times they will allow PFDs or settlements.

As far as updating monthly, I think that's there way of getting your attention and wielding, inexpensively, the power that's at their disposal. March is still over 1 1/2 years off. During that time, the updates can keep you from getting good interest rates and perhaps the car or home you're interested in purchasing at a decent rate. 

[jeffeverde]

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@pizzadude wrote:

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Unfortunately this is not the case, there are many examples where CAs have obtained default judgments on out of SOL debt.    SOL is your defence in court if you are sued for out of SOL debt.

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Doh!   My mistake.  I'm in California --  I forgot that not everyone has the protection of our CFDBPA.  Collection lawsuits ARE time-barred at 4 years, here.

[pizzadude]

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@jeffeverde wrote:

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@pizzadude wrote:

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Unfortunately this is not the case, there are many examples where CAs have obtained default judgments on out of SOL debt.    SOL is your defence in court if you are sued for out of SOL debt.

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Doh!   My mistake.  I'm in California --  I forgot that not everyone has the protection of our CFDBPA.  Collection lawsuits ARE time-barred at 4 years, here.

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I think there's one other state ( NC maybe ? ) where this is also true, but all others can still be sued for out of SOL debt.