charged off after payment arrangement

[Anonymous]

I recently had a checking account that was overdrawn by less than a $1000. I then set up a payment arrangement, however the account was charged off after the payment arrangement was set up and I have made all of my payments on time. Are they allowed to do this? I asked the lady from the credit union that I've dealt with if they'll change it from charge off to closed or something less derogatory, and she said they can't because it's illegal. Should I talk to a superior to get it changed?

[RobertEG]

FCUs are subject to the federal banking regs that mandate the charge to profit and loss once debts reach a certain stage of delinquency that meets regulatory criteria that the debt is unlikely to be paid.  Making payments does not technically remove the delinquency status, but does affect the determination as to whether or not the debt is likely to be repaid.  I would thus question the taking of a charge-off if done AFTER you began to make payments, thus showing actual repaymennt of the debt.

The question I would have is whether or not they did the charge-off before or after you began repayment.

A party does NOT report the date that they actually took a charge-off to the CRAs.  Reporting of a charge-off only states that they took that accounting measure at some prior point in time.  The only date required to be reported on a charge-off is the related DOFD, which is needed by the CRA to then calculate the exclusion date of any reported charge-off.

On what basis are you concluding that the charge-off was not taken until after you made a first repayment on the delinquent debt?

[Anonymous]

We had set up the payment arrangement before they had reported the account as charged off.

[RobertEG]

They took the charge-off before they reported it.

The key date is not when they reported the charge-off, it is when they did the charge-off.  You cannot determine when they took the charge-off based on any date reported to a CRA and shown in your credit report.