Auto Loan - charge off

[Anonymous]

Can a auto finance company report a balance on a charge off auto loan each month? My auto loan defaulted in Jan 2015 and the finance company reports a balance every month as if it's a new charge off account, which doesn't slow the derog account age. Is this legal? 

[gdale6]

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@cromanda wrote:

Can a auto finance company report a balance on a charge off auto loan each month? My auto loan defaulted in Jan 2015 and the finance company reports a balance every month as if it's a new charge off account, which doesn't slow the derog account age. Is this legal? 

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Yes they can and its legal. The monthly updating is a weapon they use to keep your Fico score depressed as it looks like it just happened in the eyes of Fico. I would be moving to settle to stop the updating and then it can begin to age and become less of a score killer as time goes by.

[RobertEG]

The reporting of the charge-off is separate, and does not affect the continued obligation for the entire debt.

If the debt remains unpaid, then updated reporting is proper and informs others that the debt, as of the date of their current reporting, remains unpaid.

[Anonymous]

Thanks makes sense.  So the next step should be to settle on the account.  The debt is 14k what would be a good offer?

[RobertEG]

Settlement is a negotiation.

If you are not in pressing need of immediate satisfaction of the debt for some reason, then you can start lower in an initial offer.

However, it is noted that the default was only about a year ago, so the debt is likely still within SOL.

Thus, you may still be in peril of their initiating legal action for recovery of the entire debt.

If you contact them with any offer to pay, they may first do a litigation review, and decide to pursue the full amount.

If they bring legal action, are you prepared to pay the full amount to avoid a trial and possible judgment?