Charge Off Question

[RobertEG]

The creditor can continue to report monthly delinquencies after reporting a charge-off if the account remains delinquent.

Many creditors will cease that additional reporting, but are not required to do so.

However, you can dispute the accuracy of the reporting if it shows only 90-late.

COs are normally taken at 120 days for loans, and 180 days for credit cards.

The highest monthly delinquency category is 180+ late.  If you wish the report to accurately show that level of delinquency, you are free to file a dispute.

However, consumers rarely dispute for the purpose of having a delinquency corrected to show a higher level of delinquency (such as replacing a 90-late with a 180+ late)

It has become common practice that reporting a lower level of delinquency is not disputed as inaccurate, but you can certainly dispute on that basis.

You are then likely to get corrrection to show progressive delinquencies up to 180-late, and then 180+ late every month thereafter as resolution of the dispute.

Most consumers would not opt to dispute and add more or higher levels of reported deliquency.

Your call........

[WayUpto850]

Thanks RobertEG!!  I will consult with my credit counselor and see what is the best way to go - dispute or "let sleeping dogs lay"....this account is set to fall off my credit report in December 2017.  It may be worth it to request Early Exclusion. 

[WayUpto850]

OK, I just spoke with EX rep and what we agreed is the account status should be updated to show that it is "closed" and the remarks will state the account was charged off.  She advised the account will continue to report for 7 years.  It is set to automatically fall off Feb 2018.  She suggested I request EE in Nov 2017.  In the meantime the account will be updated to show it is a closed charged off account.

[WayUpto850]

OK, I just got credit counseling.  The counselor advised as follows:

The debt is set to fall off of my credit report within the next 6-7 months. 

a. If I do nothing, then it will continue to hold my score down; although, because the default occurred a while ago, the current impact to my credit score is not as much as it was initially. 

b. If I contact the collection agency now, and try to negotiate a settlement payment, I may trigger more aggressive collection activities and paying off the debt may not improve my score that much.  In addition, paying off the debt will "reset" the SOL for reporting - unless the collection agency agrees in writing to provide me with a settlement letter stating account should be deleted (PFD).  If I receive a PFD (best scenario) I could see an improvement in my credit once the item is paid as agreed and deleted.

c. If the collection agencies does not agree to a PFD, then they have the remaining 6-7 months to file a lawsuit and pursue it in court.  Do I want to "trigger" this possibility or just let the SOL run out and the item fall off my credit?

Sidebar:  I am in desperate need of surgery; however, my doctors have told me I need to move to an ADA housing before the prodcedure can be successfully done.  This is the only unpaid "baddie" on my credit file.

Forum:  I am interested in hearing your advise, should I take the chance and contact the collection agency and try to negotiate a settlement PFD or should I just let "sleeping dogs lie" and once the SOL is reached - then this item will fall off on its own?

[rmduhon]

The debt can NOT be reset for reporting. Credit reporting exclusion period is based upon the DoFD and does not change by paying the debt. As for being sued, what is the SOL for your state? If the debt is beyond the SOL then you have a ready defense for the case.

[WayUpto850]

SOL in California is 4 years.  I just checked and EQ states the date of Final Default (DoFD) is 01/2011.  So I guess the SOL has exipred in 2015 for this acct!!! If summoned I will show up in court - so successful suing is mostly not an option for collection agency and I see that as a "bargaining chip" for me to negotiate with the collection agency for a PFD!!!

Equifax states they will remove the account in July 2017 and Transunion and Experian are stating it willl come off Dec 2017. Since I would like to see this resolved sooner rather than later, I am now thinking contacting the collection agency and attempting to negotiate a settlement PFD is not such a high risk option.

Thx rmduhon!!! 

[WayUpto850]

Just called Creditor - the bank still has the acct - not a collection agency

I was not able to speak with a "special account agent" - closed - I'll try again later.  Ran the account through the myfico and transunion credit score simulator - and by simply paying down the balance so that the account is under the Credit Limit, my score would increase alot (+25 to +30 Pts). Credit Limit was $1000. Bank ran the balance up with late fees prior to and after DoFD.

I am still confused about reset of debt - credit counselor states making a payment will rest the DoFD - others on Board say not so.  I guess I will try a credt attorney and see what they advise. 

Correction:  My baad!!! credit counselor states making a payment can reset the SOL (for legal action) !!!!! I apologize now I see why people are trying to correct this thread

[WayUpto850]

In the morning I will confirm with a Consumer Protection attorney if a partial payment on this expired charge off account will restart the SOL.  Just read an article that states SOL can be reset if you acknowledge the debt is yours or make a partial payment - which is inline with the credit counselor's warning.

http://www.bankrate.com/finance/debt/6-ways-not-to-reset-old-debt-6.aspx

 http://www.nolo.com/legal-encyclopedia/time-barred-debts-when-collectors-29805.html

[RobertEG]

Your advisor is providing incorrect info.

Congress amended the FCRA by addition of section 605(c), for the express purpose of setting the exclusion date of a collection or charge-off as being based ONLY on the date of first delinquency on the OC account.

SOL for bringing legal action is entirely different, and can in most states be reset by making a payment that is less than the full debt.

However, it is clear that there is NO reset of the credit report exclusion period based on any payments towards the debt.  Period.

[WayUpto850]

Credit Counselor's warning was in reference to the SOL for legal action regarding debt collection.  It is understod that the debt will fall off credit report after 7 years regardless if payment is made.