Proper Reporting of canceled debt

[sweetness1127]

Pulled my credit report and the two canceled debts from chase which I recieved the 1099-C last year are being reported with a balance and as 90+ days late (46Times). How should these be reported and are there any statutes I can cite in my dispute to the creditor and reporting agencies? They were charged off back in 2009, canceled in december of 2012.  February of this year I received a letter stating that they would be reported as a charge off with balance if that matters in all this mess. Thank you in advance.

[guiness56]

Once they sent the 1099-C they cannot report lates or a balance.  There are a couple of OCs that continue to do this.

[RobertEG]

Any prior derogs that occured before they discharged the debt will remain.

You can dispute the reporting of a current balance if the debt has been cancelled, but the occurence of the prior derogs would not be negated by discharge of the debt, either by payment or cancellation.   If the CO occured prior to the discharge, they can still report . 

I suspect the reporting of what is being interpreted as new 90+ lates is acutally the reporting of prior payment history prior to discharge at those delinquency levels?

Current status, which is only a snapshot of account status as of last reporting, should show discharged, but the pior derog status is retained under a separate Payment Rating code.

As for the inaccurate reporting of a current balance, I would send the creditor a direct dispute, with basis being their failure to have promptly updated their reporting so as to maintain its currrent accuracy, as required under FCRA 623(a)(2).

[sweetness1127]

The credit report I have pulled via Myfico from Equifax and Experian shows Chase has reported 90+ days late every month since December 2010.  With the recent month Being September 2013.Transunion does not show any late days, just the balance.

When should have this stopped at Charge off date which would of been December 2010 or Canceled date which was December 2012?

Thank you so much for your help.

[guiness56]

At the time the 1099 was issued.

[sweetness1127]

http://cfr.vlex.com/vid/903-discharge-indebtedness-reporting-19750371   Does this mean any  indebtness discharged or just at a Federal level?  I have also found a simlilar USC for departments of labor, energy, VA. Just can't find the specific one for Credit cards, but since they are related to money, would they fall under the umbrella of Finance?

We tried back in February to get the balance set to zero and monthly reporting stopped, at that time we were told this was correct by a letter from Chase and also by a CSR that my husband spoke to. So I think we need to cite something besides FCRA 623(a)(2).  these people are a pain to work with to say the least.

[guiness56]

That particular one is only for Federal debt.  But, it stands true for all forgiven debt.

Seems there are several, including Chase, that seem to think it is correct.

I had found the source at one time and of course I can't now.  I will keep searching.

[sweetness1127]

Thank you. If I find it first, I will be sure to let you know. Chase bought out our WAMU cards and began balance chasing and its been horrible ever since. For the past 4 years we have done excellent in paying our bills, but since Chase insists on reporting this as a late payment monthly its killing our efforts. I want to make sure that my letter to them or the credit agencies just don't get rubber stamped as 'correct reporting' again.  We would love to be able to get our VA loan and buy our home.  But the credit score is keeping us from being able to do so.

[sweetness1127]

In doing my research I came across this blog, http://creditfactors.com/2013/07/suing-chase-and-equifax-for-verifying-incorrect-late-payments-and-b... (forgive me if its not allowed to post links) ....anyone successfully disputed this with chase. Its pretty much word for word our experience.

[guiness56]

That is actually giving false information.  It does not matter that an account is closed, because it is only closed for use by the consumer.  Once a creditor charges off a debt, the debt is still owed.  Either to the OC or if they sold it, to the CA collecting on it.

If the OC still owns the debt, they will show a balance and report late payments until the debt is paid.   It is legal.

If the OC sold the debt to a CA, the OC can no longer report late payments from the date the debt was sold.

A CO or written off, is not the same thing as receiving a 1099-C on a debt.  A CO is an accounting term used when a creditor doesn't think they will get paid.  They write it off and get some relief from the IRS.  The debt is still owed though.

A 1099-C on the other hand, is for forgiven debt.  Meaning the debt is uncollectable.  Even though I cannot find the regulation that states how it is to report, I did run across a few lawsuits where the judge sided with the consumer.  Once a 1099-C is recived and they pay taxes on it, the debt is not collectable.