Out of Curiosity

[John060675]

I have a Pen Fed CC that was charged off two years ago.  I called them recently to see if I could start paying them, and they told me that the account has been sold to a CA. The CA is not showing up on my CR, but the tradeline from Pen Fed is update every month through the CRA's.

What would happen if I sent Pen Fed a check?  Would they accept it and lower the reported balance, or would they just send the check back to me?  I would really enjoy paying them instead of a CA, but I do not want the money to go to waste.

Thank you.

[RobertEG]

If the OC has, in fact, sold the debt to the debt collector, they can no longer accept payment of the debt or any portion thereof since they no longer own it.

In that event, you would be required to deal only with the debt collector.

The OC should now be reporting a balance owed on their account of $0.

[Anonymous]

Legally if they no longer own the debt they can not accept money.

What they may do is forward the check to the CA who may then put it on your CR.

[John060675]

Robert,

I was under that assumption; however, my balance from Pen Fed shows $15,000 owed on my CR's.  It also shows it as being charged off.

Since I cannot pay them the money, and their books show a $0 balance on my CO account, can I get them to show $0 on my credit report?  I hope that makes sense.....sorry if confusing.

[RobertEG]

Balances reported on your CR work like this.

When you have an unpaid balance with the OC, they report that to the CRA under your account as the debt balance owed to them.

The charge-off is totally irrelevant to the debt or the amount reported.  The CO is simply the recording of an internal accounting measure they took, and has no effect on the debt owed or who you owe it to.  So dsregard the CO.

If the OC assigns the debt to a debt collector for collection, but retains ownership of the debt, then the debt collector will report the balance that is referred to them for collection.  It can, and usually is, the same amount at time of their collectin referral as is being reported by the OC.  But the debt collector reporting is not of ownership of the debt, but rather of the amount under their collection authority.

If the OC sells the debt to the debt collector, it changes.  The OC must then update thier account to $0 balance.  At that time, the balance reported by the debt collector becomes, not just the amount they are collecting upon, but also the amount of debt they own.  The bottom line is that amounts reported on your CR by a debt collector dont necessarity reflect their ownership of the balance due.  When the OC still owns the debt, you could pay either the OC, if they choose to accept payment, or their designated agent, the debt collector, as both have authority to collect the debt.  Once the debt collector owns the debt, they are the only party authorized to accept payment.

[John060675]

Thank you for the information.