Creditor Charged-Off account after 90 days, is that legal?

[FinStar]

Yes, it's perfectly legal for an entity to charge-off any delinquent account after 90 days for an uncollected past due balance. It depends on the entity, in this case the CU, and the product.

Since the first 30 days weren't technically reported (from what I can infer), it was the 60-day mark when the account would have likely been reported as negative (30D). As with any financial product, the particular CU in question would have had to provide a written TILA + loan agreement of how payments need to be funded with a remittance address as well as a billing address in order to preserve your billing rights.

Personally, I would have checked that loan agreement to see where to send the payments and allow plenty of time for receipt given the relocation. Optionally, determine whether that particular CU had any type of Co-op agreement with any other local CUs to make a payment in person, if the option was available.

Not sure what, if anything could be done given the time to correct any problems has elapsed and at this point they're not willing to entertain any GW for removal. That being said they didn't really violate anything based on the information you've shared.

[Anonymous]

I guess what I am struggling to understand is why you took no for an answer. Doesn’t really seem like you pressed them very hard to find a way to pay them. I would not have given up until I had escalated all the way to the top before it even went delinquent and I would have had a CFPB, BBB, and state attorney general complaint filed against the CU along with recorded conversations (I live in a single party state so this is legal) where I tried to find a way to pay.

Unfortunately, you have limited recourse at this point and I wouldn’t be holding back payment just to think you have something over them — credit unions are far more likely to sue from what I’ve seen.

[Anonymous]

Foxy, thank you.  What happened was I was in contact with them the whole time, full intent to pay, just getting bad information "We only accept in-branch payments" "we don't take debit cards" "we take debit cards but only Visa".

Then around 3 months late I called and they said they can take a money order in the mail, I said great thank you, and I was about to send payment in full, when I get an alert my credit just went down 100 points, they had put a negative for Charge-off, I'm glad I hadn't send the money order yet because I feel thats my only leverage to get it taken off.  I sent in a very nice letter thanking them for the loan, and explained the whole situation in great detail, and asked if they can delete the negative for full payment.  They refused that, and said I can pay it and then that will reflect on my credit report, they know full well that will stay on my report for 7 years.  I don't understand the hard-headed stupidity of rejecting such an offer.  I pay you your money you take off the negative.  Why would that be rejected?

[Anonymous]

PFD arrangements are often rejected by creditors because they are supposed to reject them. It’s actually against the terms of the CRAs to offer pay for delete. Removal is only appropriate when the information is incorrect. That’s why it can take many letters to succeed. 

If you don’t pay it and they place it with a collection agency or they sue you, you’re going to have more marks on your credit to deal with. CUs are very difficult to get a PFD arrangement from. Paying off the debt and then doing a GW letter campaign would be more advisable. OCs generally won’t do PFD, collection agencies are better known for them. Based on how your experience has been so far, I’m betting they’re not going to even consider working with you until you pay them. 

[Anonymous]

Saeren, thank you that is helpful, I just didn't want to pay them and then lose all my leverage and have them say "sorry it's staying on there for 17 years, you should have paid your bills".  I actually am friends with a man who's brother is on the board of directors there, I might see if he can pull some riggings and get this taken off if I pay.  Like I said, I'm just surprised at the idiocy of rejecting money just so you can keep dinging someone's credit every month.  Like its a small-town credit union, it's not like they don't need the money.  Weird.