charge off valid?

[Anonymous]

I purchased an auto in 03' and had several legitimate lates durring the finance period. In 06' I was really late like 120 days but soon after I sold my house and had used some of my profit to pay the entire loan off in one shot.  I received pay off letter and title from Honda but the CR account is listed as a Charge Off. Is there any way to revert this back to a zero balance with lates status..?

[IOBA]

It's worth calling Honda and saying you think there might be a mistake, but are confused, would they help you understand it.

Then have them pull the account information and go over it with you.   It may be that in their books, you were 180 days late and it went to charge off status before your payoff payment cleared.  If that is the case, they maybe reporting accurately, but you can ask them to update it to paid in full, zero balance.

[RobertEG]

A charge-off is not, per se, simply a credit reporting matter.  A charge-off is an internal bookeeping measure done by the OC.

They notify the IRS that the debt is now considered "uncollectible," usually due to a period of being 120 or more days late.  The IRS then permits them, for accounting purposes, to shift the bad debt over in their accounting ledger from a collectible asset to a uncollectible liability, thus reducing their quarterly taxes.

Once an OC does a CO, they dont have to report it to a CRA, but they usually do.  Doing a CO does not eliminate the debt or your obligtion to pay.  Paying the debt does not negate the fact of the CO.reporting to your CR.  It just updates debt balance on the account to $0, but does not mandate any CR reporting deletion.

The only way to get it removed is to send them a GW letter.  They wont udo the CO itself, but since reporting of the CO to a CRA is optional on their part to begin with, there is a chance that they will delete that CRA reporting.  Having taken them to the point of designating the debt as uncollectible when they did the CO itself, it may be a tough GW sell.  All you can do is try.........