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HELOC charge off

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HELOC charge off


Location: Atlanta, GA
My husband took a HELOC in 2005 for $35K from Chase and only paid the interest until 2015 when the principal was due and couldn’t afford to pay. The loan was charged off in December 2015.
Currently, the loan is reported as chargeD off on all 3 credit bureaus.

Yesterday, received an offer from Chase to with a few different options:

1. Pay lump sum payment of $2478, lien will be removed and credit bureaus will be updated as account resolved for less than the full balance.

2. Pay $454 for 6 months for total of $2724, lien will be removed and credit bureaus will be updated as account resolved for less than the full balance.

3. Pay $248 for 12 months for a total of $2976,
lien will be removed and credit bureaus will be updated as account resolved for less than the full balance.

4. Pay the full balance of $34, 332, lien will be removed and loan will be updated as paid in full.

We are leaning towards option 1 which is an affordable settlement, however the settled part scares me.

Since the loan was charged off in 2015, does this mean we will restart the 7 year clock until the derogatory entry is removed? As of right now, hoping it will get deleted by December 2022.

I would appreciate any help you can provide.
Message 1 of 7
6 REPLIES 6
Established Contributor

Re: HELOC charge off

WOW!

 

They are willing to accept <$3000 for a loan amount of $35,000?

 

That is amazing.  And you have these offers in writing?


__________________________________________________

Licensed NC Mortgage Loan Originator
Message 2 of 7
New Contributor

Re: HELOC charge off

WOW they are offering a 8% settlement, I would have sent the check yesterday. I’m surprised because they could’ve taken you to court and get a much bigger judgement which would further hurt your credit and possibly garnish wages. DO IT NOW!
Message 3 of 7
Community Leader
Senior Contributor

Re: HELOC charge off


@MamaMiaTZ wrote:

Location: Atlanta, GA
My husband took a HELOC in 2005 for $35K from Chase and only paid the interest until 2015 when the principal was due and couldn’t afford to pay. The loan was charged off in December 2015.
Currently, the loan is reported as chargeD off on all 3 credit bureaus.

Yesterday, received an offer from Chase to with a few different options:

1. Pay lump sum payment of $2478, lien will be removed and credit bureaus will be updated as account resolved for less than the full balance.

2. Pay $454 for 6 months for total of $2724, lien will be removed and credit bureaus will be updated as account resolved for less than the full balance.

3. Pay $248 for 12 months for a total of $2976,
lien will be removed and credit bureaus will be updated as account resolved for less than the full balance.

4. Pay the full balance of $34, 332, lien will be removed and loan will be updated as paid in full.

We are leaning towards option 1 which is an affordable settlement, however the settled part scares me.

Since the loan was charged off in 2015, does this mean we will restart the 7 year clock until the derogatory entry is removed? As of right now, hoping it will get deleted by December 2022.

I would appreciate any help you can provide.

First, I agree with everyone else, this is awesome!

 

Second, no, it will not restart the clock because you’re agreeing to settle the loan. I agree with choosing option 1 because you dont want to set up a payment arrangement, something happens, then you default. 

 

Finally, IDK, but I wonder if this means you’ll get a 1099. Hopefully someone can answer this and if yes, for how much?

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Message 4 of 7
Valued Contributor

Re: HELOC charge off

I’m thinking at charge off they may already have gotten a 1099. Like everyone else I would jump on this. Also surprised they didn’t take you to court.
Message 5 of 7
Valued Contributor

Re: HELOC charge off

I had a charge off from 2011 (not a Heloc) and I just got my 1099 (in Feb 2019) to file for 2018 taxes March 2019. It had fallen off my report around Oct. last year. So I guess you can get a 1099 anytime?

"LEAVE A MESSAGE AT THE BEEP"
Message 6 of 7
Established Member

Re: HELOC charge off

Yes, this came in writing. This is third time they offer us to settle. The first time, the offer was around $5K, second time was around $3.5K and this is the third offer and (maybe) final offer. The mailer came directly from Chase and not a collection agency by the way.

At the bottom of the mailer, it states once you choose the option between 1-4 then call the 800 number to complete the transaction.

It also states, a 1099 will be issued if one of those options is accepted and to consult a CPA how it will affect our taxes. We had not received a 1099 when the HELOC was charged off.

Thanks everyone for all your replies and will call that number to make the payment.
Message 7 of 7
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