Collection / Charge-Off Strategy

[tufa4311]

Ok, I have become the "go-to" guy at work when it comes to credit stuff. I know a little about this and that, and I learned it all here, but sadly that seems to make me a SME among my friends and co-workers. I say sadly only becuase more people should be educated about alll this but I guess it's to be expected. (in software analysis, which is what I do, a "SME" is a "subject matter expert" - again, no expert here but relative to what they know, pretty close

So, while encouraging this co-worker to get on myFICO I'll assist with what I can until he does. Moving on...

He says he has a collection from AT&T that he thinks has been charged off, with a $100 balance still owing. I asked him to chk his report to confirm. So:

- the OC is reporting late payments and the CO

- the CA is reporting the collection

Options:

1) if the OC still owns the debt he can request they pull it back and then do a PFD. Then try a GW with the CA which will most likely not work as he has no leverage with them

2) if the OC no longer owns the debt he can do a PFD with the CA. Then try a GW with the OC to remove the entire line which will most likely not work as he has no leverage with them

Am I missing anything?

(and, yes, this is about a co-worker and not me! Those of you who know me recall I had 1 30-day with CapOne that took almost a year to GW delete but it worked!)

[RobertEG]

If the OC still owns the debt, then you can adress deletion of the collection in one of two ways.

First, you can make a PFD offer directly to the debt collector.  If the debt collector accepts, then you have a legal agreement, and if you then send payment to the debt collector, they must delete their collection.

That would have no effect on the OC reporting of the charge-off.  That is separate reporting by the OC, and the debt collector cannot agree to its deletlion.

You would then pursue deletion of the charge-off via GW requests to the OC.

Second, you can contact the OC and ask that they terminate their assigned collection authority to the debt collector and receive payment directly from you.  That is meddling in their business, but should they accept, then termination of the collection authority to the debt collector PRIOR to your payment of the debt is basis under the CRA reproting policy for requiting the debt collector to delete their reported collection.  With no statutory requirement that they delete, it could turn into a hassle if the debt collector dallies or refuses to delete, but ultimately, you have the CRA reporting manual as authority to pursue required deletion.

Your offer to pay to the OC could also be further conditional upon their agreement to also delete their reported charge-off (i.e, your offer would request both termiantion of their assgined collection authority to the debt collector, and agreement to delete their own reported charge-off).

If the OC has sold the debt, there is no collection assignment to terminate, and no debt owed to them, so they are out of the picutre.  They cannot accept any payment or withdraw any collection authority.

If you then pay the debt collector, their deletion would be totally voluntary.  There would no longer be any CRA policy instructing the debt collector to delete.

In fact, CRA policy at thtat point instructs debt collectors NOT to delete their reporting based on payment of the debt.

[tufa4311]

And if the OC sold the debt he would also have to GW the OC for a TL removal, correct? As, even though the debt is sold, the OC can still report the lates and CO, yes?

[Anonymous]

---

@tufa4311 wrote:

Ok, I have become the "go-to" guy at work when it comes to credit stuff. I know a little about this and that, and I learned it all here, but sadly that seems to make me a SME among my friends and co-workers. I say sadly only becuase more people should be educated about alll this but I guess it's to be expected. (in software analysis, which is what I do, a "SME" is a "subject matter expert" - again, no expert here but relative to what they know, pretty close

So, while encouraging this co-worker to get on myFICO I'll assist with what I can until he does. Moving on...

He says he has a collection from AT&T that he thinks has been charged off, with a $100 balance still owing. I asked him to chk his report to confirm. So:

- the OC is reporting late payments and the CO

- the CA is reporting the collection

Options:

1) if the OC still owns the debt he can request they pull it back and then do a PFD. Then try a GW with the CA which will most likely not work as he has no leverage with them

2) if the OC no longer owns the debt he can do a PFD with the CA. Then try a GW with the OC to remove the entire line which will most likely not work as he has no leverage with them

Am I missing anything?

(and, yes, this is about a co-worker and not me! Those of you who know me recall I had 1 30-day with CapOne that took almost a year to GW delete but it worked!)

---

AT&T does not directly report, IME - at least they never reported my account as OC, no lates, nothing. It only showed as a collection account from ERC, which changed to Bay Area Credit last December. They will normally use several collectors to try to collect the debt before they sell it off. Best option is monitor reports and notices/bills from collectors concerning the account, and look for the collection to suddenly vanish from the report, or for a notice/bill from a different collector to suddenly show up. When that happens immediately contact AT&T or the new collector and pay the account, with the promise that it will not be reported. 

How old is this account?

[RobertEG]

Yes, the respective reportings of the creditor and debt collector are limited to their own activities, and deletion of the collection by the debt collector would not affect any reporting of delinquencies or a charge-off that was reported by the OC.

In fact, if the debt collector purchased the debt and then agreed to a PFD, any payment would go only in their coffers.

The OC would not see a penny of the payment.  They sold the debt to the debt collector at a substantial discount, which was not enough to offset their loss.

The OC, upon sale of the debt, was finished with the debt, and had a net loss.

Subsequent payment to the debt collector does not mitigate that loss, and thus is unlikely to influence the OC to delete their derog reporting.

[tufa4311]

---

RobertEG wrote: Subsequent payment to the debt collector does not mitigate that loss, and thus is unlikely to influence the OC to delete their derog reporting.

---

 mmm, I don't know. The "person" you are referring to here is the big, bad, ugly, mean corporation. But when we call we don't talk to that monster, we talk to Jean, in Support somewhere, who couldn't give a crap about the corp that hired her at some low wage, she just wants to go home at 5pm - she is the one that can do something and she has many times.