Closed Accounts - Charge-offs

[randaljon]

Can anything be done to repair or change a charge-off with orginial creditor? Or do you just have to wait it out 7 years?

[RobertEG]

A charge-off, per se, is an accounting procedure that reported the debt as uncollectible to IRS, and moved the debt from an asset to a liability on their accounting ledger.

They are not apt to go back to IRS and file an amended return to remove the tax benefit of the charge-off.

The repoting of a charge-off to the CRAs is a separte issue.  The OC can do an accounting charge-off without even reporting it to  CRA.  The reporting of a CO to a CRA is not the CO itself.

A creditor could choose to delete the reporting of a CO to the CRA, even though the CO itself remains.  It is totally up to them. 

Unless deletion of the reporting is coupled with an incenive for them to delete, such as part of a PFD negotiation, I dont see much reason for them to delete reporting of debt that they have already told the IRS is bad debt that is considered uncollectible.  Hardly a strong position for asking GW deletion.

[randaljon]

Thanks, so I could try to offer a debt settlement in return of deletion of the CRA reporting? Could this hurt me in anyway if they decline? Like affecting the 7 year drop off?

[RobertEG]

No,it could not hurt you.

The CR drop off date for a charge-of is cast in stone under FCRA 605(c).  it is a date-certain of 7 years and 180-days from the date of first default (DOFD) in the OC account. No later activities can reset this date-certain.

[randaljon]

Is it wise to send a validation letter to a past creditor who has a charge-off against you? Or should I just send a debt settlement offer? I am not talking about a CA here, just a past creditor...

Thanks to anyone who answers. I appreciate the advice...

[RobertEG]

DV letters pertain only to debt collection practices by a debt collector.  You cannot DV an OC.