@MamaMotherMe wrote:
Ok sorry to double ping on this but you seem knowledgeable and I'd love your thoughts (or anyone's)
is it possible that Nordstrom automatically charges off closed accounts and that's why they've marked the account as zero balance (though they did not mark the account as a charge off). They're collecting payments but can't report a balance for tax or other legal reasons? Is that a thing?
From your other thread:
How do I know if a card is charged off?
I have an old credit card that was closed by the creditor. I've been making payments on it but the creditor is reporting it as zero balance since 2019. Anyway, this month I was stupidly 120 days late and although I made a payment today, I'm curious how I would know if this was charged off.
If it were, how would this be reflected on by the CRA given the account has been dormant/not reported on since 2019?
You're in a bit of a spectacularly sticky, unenviable situation. To clarify, when an account is charged off with a remaining balance, the remaining balance should be reported monthly until it's either paid off by the borrower, or when it's sold to a debt buyer or collection agency, which in most cases when that happens, the borrower then has a collection account show up on reports with the remaining balance. It's not at all uncommon for CO account reporting to go dormant for months, or even years in some cases. Some people find out the hard way when they dispute these accounts, and instead of being removed, the reporting of the CO gets updated to a more recent status, further dinging their scores.
The fact that TD Bank reported it simply as closed and also with a zero balance, but also continues to accept payments would indicate they still own the debt, but made an error in reporting. Which under the right circumstances, and with adequate proof could be corrected. I'm sure you don't want them to change it to a CO with the remaining balance.
Here's the tricky part. The argument could be made that since they've reported it as closed with a zero balance (and you have proof of such), therefore they have no right to accepting/collecting any more payments towards the account since there's no balance. In addition, they shouldn't be able to change the reporting status of the account. That's all fine and good... However, by continuing to make payments you've acknowledged you still owe a debt which could be argued has kept the SOL window to legally collect on the debt open and current. It also opens the door for them to show proof their reporting was in error, which in turn could be corrected. Do they have the proof to satisfy FCRA regulations? That's unknown.
I have questions in similar to the ones @GZG asked that went unanswered:
- When the account was closed, how many days past due were you? 120, 150?
- How do you know how much you owe, do they continue to send statements every month?
- What is the remaining balance?
- Were you ever issued a 1099-C on the remaining debt?
