Charge-Off Question!

[PapasWifey]

Here's the scoop:

In 2009, Sallie Mae contacted my mother via the phone (she is co-signer on the loan) and made an arrangement with her to make a monthly payment (of about $450) to have the loan paid off in one year... they were reducing the amount owed.

After making about 10 months of payments, my mom finally told me about the arrangments. The balance had hardly gone down any as it was mostly going to interest. After contacting SM by phone to find out why the balance is not close to being paid off considering only 2 months were left on the loan, the Acct manager (who was extremely rude by the way) stated that no payment arrangements have ever been made to have the loan paid off, which was a lie.

But seeing as how it was done by phone there is no proof.

Well, mom lost her job and couldn't make the payments. I mailed 3 letters (certified) to SM asking to make arrangements by mail to pay off the loan and have heard NO respone back. This has been since 2010.

Checked my EQ credit report today and SM is showing a charge-off!

Date Opened: 08/2005                                           Balance: $ 6,286

Date Reported: 12/2011                                         Amount Past Due: $ 1,953

Date of Last Payment: 09/2010

Scheduled Payment Amount: $ 107                        Date of Last Activity: N/A

Date Major Delinquency First Reported: 04/2010    Months Reviewed: 44

Creditor Classification:                                             Activity Description: N/A

Charge Off Amount: $ 6,663                                    Deferred Payment Start Date:

Date of First Delinquency: 07/2009

How do I go about finding out how to make payment arrangements on this account (I didn't see any other company info), and also is it possible to have charge-offs removed from the credit report even before the balance is completely paid off? How long does this type of stuff stay on the report? I am in California.

Any advice is most appreciated!

[2NE1]

I believe any kind of charge-off accts stay on your report for 7 years... doesn't matter what state you live in. For the DOFD, it seems like this negative acct won't fall off your CR until July 2016? I don't think you can have a charge-off removed before paying it off, even if you do pay it off in full or settled it for less, then CA is not required to remove it.

Is SM a CA? if so send them a DV letter and give them 30 days to get back to you, if they don't respond back, then dispute the account with the CRAs by letting them know that you've been trying to get this account debt validated.

If SM is a CO then try to get a hold of the CEO and let them know your situation.

PS: in the future, any payment arrangements you make have them done in writing, I've deff learned this the hard way!

[LIGHTNIN]

Agree with prior post by 2ne1,

I would suggest pulling your Free CR's from annualcreditreport.com....because they generally have more info, then the ones from a 3rd party.

It's very common to confuse CRTP (credit reporting time period) and SOL ( statue of limitations).

 CRTP is the length of time an item reports on a CR.

SOL is the time period a creditor has, to sue and win in court. Each state has different laws about debt. 

SOL in Calf is 4 years on a written contract.

[RobertEG]

If the posted reporting was done by SM, they are the OC, and not a debt collector.

Charge-offs can be deleted by the reproting party, but only by way of their good-will (unless you can successfully dispute the legitimacy of the CO, which is extremely difficult to do if the account was delinquent).  Since a primary reason why creditors and debt collectors report to CRAs is as a tool to secure payment of debt, it is very unlikely that they will grant any CR deletion while the debt remains unpaid.

As for the payment plan issue, that is a legal contract issue.  IF they assert that she never had such an agreement and she has no written documentation, it becomes a matter of an oral contract, which is much more difficult to prove, both as to its existence and terms, in court.  They are clearly banking that she wont bring legal action.  But that is where evidence can be compelled.

I suggest, as a preliminary step, checking whether your state statute of limitations has expired, placing particular scrutiny on whether payments made after the initial period of the SOL act to reset the SOL in your state. 

[PapasWifey]

Thanks very much for the responses.

The information posted came directly from Experian. Sallie Mae is the OC and that is who is still showing as reporting it, although if I'm not mistaken I remember being referred to a CA when I tried to reach someone before.

I need to look into that..

[LIGHTNIN]

Oh, This is a student loan.

I dont know what kind of student loan you have, so this web site may or may not help you.

http://www2.ed.gov/offices/OSFAP/DCS/repaying.html

Good Luck to you.

[PapasWifey]

Hey Lightnin. Unfortunately Sallie Mae is a private lender and so the loan is not held by the U.S. Dept of Education. I looked through the site anyways though because I do have some ED loans.

I'm wondering the best way to get the 'charge off' status on this account removed before paying it totally off. It may not be possible (likely) but charge-offs really suck and I have heard no response when I tried to make payment arrangements through the mail. I REFUSE to set up arrangements over the phone with Sallie Mae, unless I have them send it to me in writing before I pay anything towards it.

I've been trying to reach them since 2010 and am getting nowhere!