Chargeoff understanding terms

[NoMelonsNoLemon]

First post

I have been reading the site for a few days now.

I found really good information and even gained the confidence to apply for two new credit cards. I was approved for one and the other explained they would email me with another offer. I am not looking for a short term gain, but rather to make progress over the next three to six months. I am also looking for common mistakes as to learn from others. I am a gamer, typically MMORPGs or FPS, as well as in the I.T field, and I am quick with the TLAs and chat text.

The posts I have read contain shorthand or chat text abbreviations and buzz words / terms. I did a quick search of Chargeoff and while I can gather a bit of information I still do not have a clear understanding. http://www.m-w.com defines the term as: to treat as a loss or expense. I think I am looking for how the process of the Chargeoff works, could anyone help me with this?

Either way I was wondering if there was a post on this topic for more then just this term, kind of a Glossary if you will.

Thank you

Something close to this link    but perhaps includes process /shrug

Eureka! and Thank you for the links below!

Message Edited by NoMelonsNoLemon on 08-11-2007 09:34 PM

[NoMelonsNoLemon]

Bump, in hopes someone replys.

[fused]

A charge-off is an account thats gone bad. Once you hit the 180 days late, the account will change from a status of late to an account that is charged-off. This is also when the DOFD (date of first default) begins. And many times the original creditor will either assign or sell this charge-off to a collection agency. You guessed it, its no loner a charge-off, it's now a collection. Please refer to these threads for more info.

http://ficoforums.myfico.com/fico/board/message?board.id=generalcredit&thread.id=8713

http://ficoforums.myfico.com/fico/board/message?board.id=generalcredit&thread.id=2689

[Anonymous]

Charge-off is an accounting term when the debt is written off to profit and loss.

[fused]

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Noah_Bodie wrote:

Charge-off is an accounting term when the debt is written off to profit and loss.

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I was wondering if I answered the question incorrectly!

Message Edited by fused111 on 08-11-2007 07:16 PM

[Anonymous]

You're pretty well spot on with it. The credit industry plays games with language. When considering one's credit score, as well as legal issues, there's no difference between collection and chargeoff. I believe the banks are legally required to chargeoff a credit card debt to P&L once it goes either 120 or 180 days unpaid. Whether they report it as a collection, a chargeoff, or both, there's no difference. Money is still owed, they likely have tossed it to an outside CA, they've tacked on upwards of $2 in fees for every $1 in debt (to maximize their tax position and minimize their losses), and they've written it off to P&L.

[NoMelonsNoLemon]

So here is my specifics:

Part question part understanding, let me see if I get this right....

The debt is from 1996 and I have seen the date change from that to 1998 on my CR.

I am not sure who has the debt right now, however they are still reporting it. A friend of mine explained that as long as I owe the debt it will not come off of my CR.

After reading posts and this url I have found that is not true, while I have never paid the debt, the fact that the chargeoff date would have to have been back in 1996 and or maybe leaked into 1997 the debt should not be reported any longer on my credit? My opressors no longer have the power of thumb!

I have though of a PFD letter, however as the debt has climbed above 400% of the original debt, and the fact that I have had to eat it for years, only servers to fire a burn baby burn attitude.

I have seen my fears, and I have past through them /flex

[Anonymous]

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NoMelonsNoLemon wrote:

The debt is from 1996 and I have seen the date change from that to 1998 on my CR.

I am not sure who has the debt right now, however they are still reporting it. A friend of mine explained that as long as I owe the debt it will not come off of my CR.

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When you say it's from 1996, are you saying that the DOFD is from 1996? If so, then it's too old to report. Dispute with the CRAs as too old to report.

You friend is very much mistaken. Once something gets 7 years old, give or take 180 days, it's gone from your CRs. Period. End of story.

SOL is what governs whether they can sue or not, and that might be shorter or longer than 7 years, depending upon one's state of residence.