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Credit card charge off now has 4k in interest?

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Member

Credit card charge off now has 4k in interest?

Just got a letter in the mail that my credit card debt(charge off) from 4 years ago from Corefirst (OC) is now at Collections Bureau of Kansas and my orinigal balance of 6k is now 10,783.70 because "interest continues to accrue" what are my options on this? As i don't want to pay these people 4k in interest.

Message 1 of 6
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Established Contributor

Re: Credit card charge off now has 4k in interest?

call them and ask for a settlement amount/payment plan

you may need to pay in one shot if they give you a settlement - so be prepared for that - hope for 50% of the outstanding amount (this will include the $4k in interest - there is no getting away from that)

 

definitely get this one down to $0, as it will be holding down your scores

 

 

July 31/2019. EX-712. EQ-704. TU-726
Dec 16/2019. EX. 721. EQ. 723. TU 746
Aug 8/2020 EX. 728 EQ. 714 TU 744
Nov 25/2020 EX. 725 EQ. 713 TU 745
Inq. EX 6 EQ 4 TU 2 - - CC 5x24, 1x12
Amex BCP $20k - Apple GS $17k - BMW/Elan $5k - Cap1 QS $16.7k - Chase Amazon $13.6k - Chase United Club Infinite $20k - Citi DC $14.5k - CreditUnion1 $9k - DiscoverIT $20.5k - HSBC Gold - $10.5k - Wells Sig Visa $12k
Message 2 of 6
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Community Leader
Super Contributor

Re: Credit card charge off now has 4k in interest?

Unfortunately if it's been sold to a CA, I believe yes, they are allowed to add fees. It's really murky how much they're allowed to, and there aren't any real laws forcing them to reveal that to you. Best you can do is try to negotiate a settlement of the total balance, fees and all. At least that's what a quick google search turned up.

 

I'll ping @RobertEG, he may have some more advice.


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Message 3 of 6
Legendary Contributor

Re: Credit card charge off now has 4k in interest?

" FDCPA 808.  Unfair practices

A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:

(1) The collection of any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law. "

 

You need to dig out your account agreement associated with the debt and determine whether or not it specifically authorizes a debt collector to add interest to the debt and also check whether your state sets any statutory or regulatory limits on the amount of interest that can be charged.

Message 4 of 6
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Super Contributor

Re: Credit card charge off now has 4k in interest?

Great information, as always, RobertEG! Love learning from you! Did not know that.
-Our Community’s updated scoring wisdom: Link to Scoring Primer.
-For Negative Reason Codes see: CassieCard’s Score Factors thread.
-ccquest’s workbook to calculate metrics for you: Link to Workbook.

Oct 2020 New Account Scorecard.Nov 2020, No New Account Scorecard (reassignment conflated with aging. EX9 not updated yet. Oldest/avg varies. Estimates above.)
Real world mortgage maxes are: EQ5-818, TU4-839, EX2-844.


RIP:
(Everything said is JMHO and is not endorsed by FICO or MF. I have no affiliation with either, just a grateful member.)
Message 5 of 6
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Established Contributor

Re: Credit card charge off now has 4k in interest?

good to know @RobertEG 

 

my rough math is that they have been charging 12-14%

and that is for interest only - unsure if any penalty amounts have been added, which would lower that %

 

basically leaving $6k for 4 years without payments, is going to add up no matter how low the interest rate is...

 

have the CA send you a full accounting report from the day they acquired the debt 

 

July 31/2019. EX-712. EQ-704. TU-726
Dec 16/2019. EX. 721. EQ. 723. TU 746
Aug 8/2020 EX. 728 EQ. 714 TU 744
Nov 25/2020 EX. 725 EQ. 713 TU 745
Inq. EX 6 EQ 4 TU 2 - - CC 5x24, 1x12
Amex BCP $20k - Apple GS $17k - BMW/Elan $5k - Cap1 QS $16.7k - Chase Amazon $13.6k - Chase United Club Infinite $20k - Citi DC $14.5k - CreditUnion1 $9k - DiscoverIT $20.5k - HSBC Gold - $10.5k - Wells Sig Visa $12k
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