bargaining an account scheduled for charge-off
Date: Sat, 01/17/2009 - 16:06
I have a revolving credit account scheduled for charge off. After making myself aware of the accounting aspects of a charge off from the creditors perspective I am left wondering if I might have some leverage to bargain a settlement.
First what portion of the debt is the creditor allowed to charge off. The actual amount loaned minus funds collected (i.e. the creditors debt liability)
or/ liability including charges, Fee's. etc.
Next If that account has fee's etc. far more than the actual loaned amount would it be in the creditors interest to settle the account even if what they could get is less than the balance.
The long and short of it is My account reflects a balance in excess of 3x any money I have borrowed and that does not even count around 2x the borrowed amount I have allready paid.
Accounting-wise, I have to make a correction to your statement.
Accounting-wise, I have to make a correction to your statement. The creditor has no "debt liability" ... it sits on their books as a receivable on the asset side of the balance sheet ... you are the one with a liability.
Because they generally take income every time they charge a late fee or interest, all those fees/charges make up the overall balance on their balance-sheet. Therefore, they generally would chargeoff your entire balance, not just "amount loaned minus funds collections".
Creditors usually will settle for less than you owe. I'm surprised they didn't offer up a settlement prior to chargeoff. Call them and see, they'll probably offer up something to you to get it closed out.
