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Debtconsolidationcare.com - the USA consumer forum

What does Charge off mean?

Date: Wed, 05/24/2006 - 07:21

Submitted by Linder Lou
on Wed, 05/24/2006 - 07:21

Posts: 87 Credits: [Donate]

Total Replies: 42


Alrightie...here we go.

What the heck does a charge off mean? Does it mean that the card will not sue me? Does it mean that they won't sue me but will sell the account off to a third party to try to get a big commission off of the balance? AND does this mean that the third party collector can SUE me and get a JUDGEMENT against me?
I have been told that the original creditor would have to sue me, not the third party and if they charged it off--they are not going to sue me.

ALSO, how long does a company normally wait before charging off? I have some 120 days past due, does that mean they are not going to charge it off?


A charge off means that the original creditor has sold the debt to a third party - a collection agency. This means the original creditor is probably not going to sue you, BUT the collection agency still can! They have assumed the debt and, provided the statute of limitations has not expired, they have the right to pursue a judgement against you.

If you have a debt 120 days past due, this does NOT mean it won't be charged off. My advice is to make a payment if you can. You do not want the debt charged off. A charge off and resulting collection account will be worse on your credit.


lrhall41

Submitted by dmj210 on Wed, 05/24/2006 - 07:56

( Posts: 123 | Credits: )


dmj210...

I can not make a payment, due to the fact all my payments are currently going towards my debt settlement company.

My debt settlement company said that the third party collection agency could not sue me. Now I am really confused.

So, does collection agencys sue alot over credit cards?


lrhall41

Submitted by on Wed, 05/24/2006 - 08:01

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Third party agencies can and will take it to court, but it varies so much that is it unpredictable. One member here was sued by HSBC, via a 3rd party collector, I was going to be taken to court by a different creditor (via 3rd party collector).

I think I read here in the forum that one part of the charge-off process is that it is a tax write-off for the original creditor. They can use the tax write-off portion to off-set the debt amount, since they usually sell the debt to the collection agency for a percentage of the original balance.

Good luck!


lrhall41

Submitted by set4sail on Wed, 05/24/2006 - 08:31

( Posts: 412 | Credits: )


I was told that my AMEX account was charged off and the collection agency did threaten to litigate me. When I started talking about payment arrangements they said they would have to contact AMEX to see if it was acceptable. If charged off means the account was sold to the agency, then why would they need to contact AMEX about payment arrangments? Are they just lying?


lrhall41

Submitted by jcrab1 on Wed, 05/24/2006 - 08:49

( Posts: 86 | Credits: )


Ok, just found out that the debt settlement company told me that it is NOT likely they will sue. They explained it like this:

Third party CA's has a really high turn over of employees and it is really stressful job. They are mostly paid miniumum wage and works on commission. They said that they have such a high rate of people to try to collect from that they tend to go after the people that are not aware of their rights and are not intimidated of them.

They told me that "pay today to prevent further legal actions" was a big difference from a "summons on the door".

Plus, they said it makes a difference if the debtor is enrolled in a debt settlement program or just simply not paying. She said that the CA would much rather get some portion than no portion at all.

I understood her and felt better, however do you all see it this away as well?


lrhall41

Submitted by on Wed, 05/24/2006 - 08:57

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jcrab1, the collection agency can have two different types of relationship with the original creditor: they can be an associated company, sometimes even a department within the original creditor's company, or it could be that the OC sold the acct to the CA.

If it is an associated or in-house collection, even doing business under a different name, then they may refer back to the OC's name for acceptable payment arrangements.

If the OC sold the acct, then it's very unlikely the CA will refer back to them.

For example, Capital One uses allied interstate and NCO as an in-house type yet still third party collector. The computer systems are linked together. The CA will make calls on behalf of Capital One, but they don't "own" the account outright.


lrhall41

Submitted by set4sail on Wed, 05/24/2006 - 10:17

( Posts: 412 | Credits: )


Linda,

I see it the same way as well. To me it seems that the charge-off is a way of getting the acct off the books of the OC, so their books look better.

I remember when I worked for a credit union, they have a contigency fund of a percentage of their assets that they put aside to off-set the charged-off accounts against. We would see the information in the monthly newsletter, with remarks that they set-off XX-amount to the account for charge-offs. Helps balance their books.


lrhall41

Submitted by set4sail on Wed, 05/24/2006 - 10:21

( Posts: 412 | Credits: )


You mentioned NCO above. Do they take people to court? I have a debt placed with them that is very strange. The balance is $318 but the collection fee is $596. How bizarre is that? I do know the courts say "reasonable" collection fees and this is unreasonable. Any insight into NCO would be most helpful. Thanks.


lrhall41

Submitted by on Wed, 05/24/2006 - 18:02

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Evidence is a must before a legal case is filed. NCO must have the legal documents to prove that the debt is legitimate. Did you dispute the item with a debt verification letter?

Know more about the activities of NCO collection agency in the threads below.

http://forums.debtcc.com/forums/about6873.html

http://forums.debtcc.com/forums/nco-finance.html

http://forums.debtcc.com/forums/nco-ca.html

I never heard NCO having a legal stand against anybody. They usually purchase age old debts and most of them are disputed. If they have reported negatively in your credit file, you must place the item on dispute with the credit bureaus. They will rectify the information if it's incorrect.


lrhall41

Submitted by Gretchin on Thu, 05/25/2006 - 12:49

( Posts: 482 | Credits: )


The poster who wrote "A charge off means that the original creditor has sold the debt to a third party - a collection agency. This means the original creditor is probably not going to sue you, BUT the collection agency still can!" is mistaken.

An original creditor can charge off an account and still retain the debt and they can still sue you.

They might continue collection efforts in-house. They might farm it out to a collection agency. They might sell it to a junk debt buyer. Only if they sell it do they relinquish their right to continue collection activities, including suing you for the debt.

A charge-off is a bookkeeping practice that allows a company to write the debt off as a loss. In no way does it affect the creditors ability to continue to try to collect or to sue. The only thing preventing that is if and when they sell the debt. Nothing olbigates them to sell the debt. If they do, then the junk debt buyer can pick up where the original creditor left off and pursue collection activities and sue you, if they so have a mind.

Even if the debt is beyond the statute of limitations (SOL) for your state, they can sue you except in a very few states (like Mississippi) where the debt is extinguished once it is beyond the SOL.

If they do sue you and the debt is beyond SOL, you can raise the SOL as a defense, which will get the case dismissed. If you don't do that, they can still get a judgement on you despite the SOL.

It is true that usually junk debt buyers do not have the paperwork to prove the debt but it is up to the consumer to know her rights under the fdcpa and enforce them by demanding legal validation. Unless you do that within 30 days of when a collector contacts you, they can still continue collection activities and they can still sue you.

It is almost always an arduous process getting a credit report corrected or changed in any fashion. The credit bureaus do not have to delete the trade line of a junk debt buyer like NCO unless you are able to force the hand of the junk debt buyer and make them admit they have no papers and AGREE to delete their trade line.


lrhall41

Submitted by on Mon, 05/29/2006 - 17:44

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You people really do blow nuts.

You blame others for you own faults and short comings.

Keep in mind, most people at NCO are just doing a job to pay for their food and families

we have scripts and procedures we need to follow...if we don't, we will lose our jobs!

Every fee is given as per contract you sign.
You think you can just take money and not pay it back, that makes you a thief. Plain and simple .

For wrong numbers, if you yell at me, it's a very good chance your number will get called again.

Threats of a lawyer, hahahaha; I wish I could laugh right at you when you yell "call me again and Im calling the attorney general or the better business bureau..." or any of that other crap. You think I care?!!!

A) We have our own legal department, not a lawyer, but a team of them.

B) As employees, do you think we give a shit? If you do sue our company, we are not responsible for the actions of it. and who really wants to be a debt collect any way.?

So go ahead call who you want...
or play nice and so will we
:twisted:


In short,

I don't want to call you!!! So pay your bill, tell the truth about how to find "John" or "Sam",
and help us, we have the same goal.
To stop the calls.

If I have offended you...good!!
That means you have done the things that I hate!!
Knock that shit off!!

God, I wish I could say that on the phone,
and though I don't, you're as sure as shit I'm thinking it, because...
calls are monitered for quality and compliance.

Signed
Yours Sincerely (I say all with Utmost sincerity)

Anonymous Truth


lrhall41

Submitted by on Fri, 08/31/2007 - 15:37

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Anonymous Truth- You are welcome here to post info about yourself, your job, etc., but not welcome to attack others. For your info- wehave, and have had several collecotors that are members of the Forum that have helped alot of us understand things. If you want to do that, that is fine, but no slamming or being rude to others on the Forums, please..KAren


lrhall41

Submitted by Bossy4455 on Fri, 08/31/2007 - 17:13

( Posts: 5854 | Credits: )


Well, my husband had a CC that he didn't pay on and it was charged off three years ago. They are now calling saying he owes 300X the amount of what the original bill was. At the time, he was out of work, and while I don't mind paying the max CC bill plus MAYBE $100 in late fees, I'm certainly NOT going to pay 300X the amount of the freaking debt, sorry!! So I told the girl on the phone if she wasn't willing to take what I was willing to pay her (since, technically, it wasn't MY debt as we weren't married then), then she can go blow! And to the guy who went off there? Get over it and get yourself a real job if you're that unhappy about where you're at! ;)


lrhall41

Submitted by on Wed, 08/20/2008 - 09:02

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I just got a call that I am being sued for a debt. I have been unemployed for the a year now and was making the min. payments but it got to the point we weren't going to eat and was trying to send as much as I can. I have missed a few payments and it is now in collections. He is saying I can pay now the full amount or be sued. I told him the best I could do is set up a payment plan with them and they are refusing. Can this happen? He is now saying that sorry I can only put this as refusal and you will be sued. I am worried about what will happen. He said if i send a payment they will not except nor will the company...can this be true. I would think they would want as much as they can get.


lrhall41

Submitted by on Thu, 11/06/2008 - 15:25

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I am amazed that you think you know everyones situations. I am in debt because my husband became disable and only has 20% use of his heart. It changed my life. So.... your so upset at us. Ponder on this....if it were not for people that have bad debt - you would not have a job. I understand why you have this job by your wonderful grammer.


lrhall41

Submitted by on Thu, 01/29/2009 - 10:21

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I am a debt collector and I believe in treating people with respect. People have a lot of things going on in there lives...

The other debt collector is a hardcore collector he has no feelings and thinks his Shit smell good... I'm sure if we check his credit report he has negativities as well.

I have negatives on my account and trying to figure out how to clear them up.. right now. JUST don't have the money and I don't like people calling me and harrasing me for 199 dollars.


lrhall41

Submitted by on Sat, 03/21/2009 - 11:46

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lrhall41

Submitted by on Sat, 05/08/2010 - 10:00

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Anon Truth: This is a business, much like a bank but in reverse. We have had our situation changed and though we would like to have the money to pay all bills, we no longer can. So, the bank offers for sale a "settlement". They would like the highest price and I would like to pay the lowest. Just like buying a car. It is unfortunate that things change for the worse, but given the situation this is the best result for both parties....and you know it.


lrhall41

Submitted by dantheman on Sat, 05/08/2010 - 12:45

( Posts: 860 | Credits: )


well if life were as simple as Anonymous Truth puts it. He would be out of a job. Your foolish statements such as: You blame others for you own faults and short comings, is pretty immature. In fact, most of these people that have "short comings" as you say, were sucked into house deals by people like yourself. What do I mean by that? It is a fact that smooth talkers, like yourself, helped get people who really did not understand how in a few to five years they would be paying triple or more than they are paying at that time Oh ya,it's in the paper work.. Ya we know, we know, but like many people are learning to their own faults(there's that word), believe what the person in front of us is saying.(stupid f*&^%*% americans) So why do we need to read when the person is telling us something different?. wierd. Let alone, having the economy nose dive along with it.
Statements like you have made is like trying to educate Latino's to educate themselves and learn the English language in the country they are occupying and to quit popping babies out and having legal Americans foot the bill. Your a tax payer, It's pretty pathetic that I have to over hear a Nurse tell a 21 year old going on her 6th baby, to make sure she uses the right last name, otherwise the state is not going to foot the bill. So you see, you get pissed about your job, and how people don't want to be harassed daily. They would probably be more willing to pay the bill when the funds are there.
The over flow of new "debt collectors" were the old smooth-no-concoinence-assholes who sold them a home they knew the people could not afford in the first place.
So maybe next time you want to go tell some of these people they have short comings, or faults, sometimes it's not due to negligence. Sometimes the debt accrued from a death and other issues that compiled after that.
I just wanted to speak for the few that can't speak for themselves.


lrhall41

Submitted by on Mon, 10/04/2010 - 14:20

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I have no assets, am self employed and still got sued AFTER I sent dv letters and elected arbitration by a ca for HSBC.I go to court this week and will fight it because of the arbitration clause that states once it's elected any right to litigate a dispute or claim in court is waived by both parties.I have a major fdcpa violation against them, now and plan to use that to my advantage. On paper you would never think I would be sued but I did get sued.Just a word of caution.CAs are unpredictable.


lrhall41

Submitted by on Sun, 01/23/2011 - 14:49

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@ deadbroke- thanks for the heads up on HSBC's attitude. I closed 2 accounts with them to prevent further late fees and interest from building up after the final nail went in our coffin. I am on disability and was scared one of these companies will come after me before I can get caught up. They did- GE Money Bank. Never a collection letter from the attorney/collector, just a lawsuit. And I found out b/c when they filed a local attorney sent me a letter offering to represent me. Instead, I called and offered a settlement and they jumped on it. So now, no court.
BUT...if you settle before you go to court, make sure part of the settlement states you are clear, do NOT accept a consent judgment. It will still go on your credit report as a public record.


lrhall41

Submitted by on Thu, 02/10/2011 - 15:26

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if you had a better job, you would not take it so personal fool....if we had the money we would pay it,,,,,,,,sure let the rich get richer,,,,,,


lrhall41

Submitted by on Tue, 03/01/2011 - 06:23

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I was reading this chain as I have a charge-off and was just trying to get some info/opinions on the matter. I am in the mtg business and as we all know if went belly up in 08. My family and I are barely making it...
I wonder if the debt collector who posted "you "people" suck" is still in the same business or if he/she is on the other end of the phone line now?

Bad things happen to good people and we just try to find the easiest way to survive.


lrhall41

Submitted by on Tue, 03/01/2011 - 06:39

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Funny how banks can raise your %rate,like chase did 2 me -8% to 29.99%,even when I paid on time
for decades with wamu before they bought them,and on the news saw that chase had bought 3
new buildings and when the recession hit walked away from the 3 mortgages,spend millions on
lawyer lobbist fighting finacial reform ,bought out the smaller banks for pennies on the dollar with
govt. loans,etc etc, but when the worst recession in most of our lifetimes hit(I'm in construction
working only part time for a 1/3 of what I used to) oh its pay up you dead beat! Big corps run this country now and give back squat.They wipe out all the mom & pop bz with little to no living wage
jobs.They blame it on teachers and cops that make to much $,its all a trickle up economy now.
and they tell you the solution is to give the top 2%,that have 95% of the wealth,more tax breaks..?
How about paying folks a living wage and no more off shore tax loopoles,no more wall st wars?
Yeah these poor big corps,they get their butts kissed with the threat of moving to china if govt
makes to tuff.I say take your desk and paper work with ya becaues you don't deserve to be
american.with all their red white and blue talk they are the 1st to sell us out.Screw the credit card co.They need to feel the same pain we do for what is mostly their fault.OK I'm done


lrhall41

Submitted by on Tue, 03/01/2011 - 13:14

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:pwe make you sick???? There but for the grace of god go you asshole......I find when people are this shitty to other people without knowing what their circumstances are....the universe has a tendency to give you a lesson in life that you obviously need to learn...you are the sick one my friend and karma is a bitch !


lrhall41

Submitted by on Thu, 04/07/2011 - 15:06

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The OC really does not have their cake and eat it too when they do a charge-off, and some or all of the debt is later repaid.
When they do a charge-off, they declare the debt as "uncollectible," which allows them to shift the debt from an account receivable (asset) on their books over to a an uncollectible debt (liability), and thus reduce their tax burden.
However, if the OC then accepts payment on the charged-off debt, they must re-adjust their books, and now declare the payment as an income (an asset). So they then pay the taxes on the former liability. That is a lot of accounting work for the OC, and one reason why they might be reluctant to pursue collection after a CO, and just sell the debt to a debt collector.

As far as a consunmer is concerned, the act of doing a charge-off is not material other than the fact that the FCRA permits the reporting of a charge-off as a derogatory item, and FICO scores it. The debt remains as collectible. It is up to the party doing the CO to square things with IRS,


lrhall41

Submitted by Lian on Wed, 05/04/2011 - 04:25

( Posts: 234 | Credits: )


thanks, good to know. Makes it easier to deal with


lrhall41

Submitted by on Tue, 07/05/2011 - 14:45

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To the person who is obviously a debt collector, and was ranting about how much they enjoy coming after people - calling them thieves, but then defended themselves by saying that collectors are only doing that shitty job to support their families. Well - boo f'ing hoo. You DO have a choice as to what kind of work you do in this free country. You are not a victim. There is always a better way. So dont try to get anyone to sympathize with you. Your choice of occupation is just as slimy and negative as becoming a meter maid, and only angry depressed desperate people opt for the jobs that help regular people's day get worse.

What's more, to claim that all the poor people you call and harass deserve it because they're thieves is just plain ignorance at it's best. Like you yourself admitted - All you do is read your little stupid script they give you. That's all you know, like a dumb little sheep in a pack.

Let me enlighten you: The credit card companies that penalize the public by spiking their interest up 25% for 2 years - just because a person paid one or two days late twice in a year are the real thieves. In MICROSCOPIC size print - buried somewhere in the contract - they include a sentence that says that they are allowed to increase the interest if payments are late. They do that hoping that their prey (the consumer) will not catch that fine print sentence in the contract. Then, they almost always increase it to the highest allowed maximum of %35 or so when it does happen. How is that not blatant, filthy, robbery and greed at it's finest? They want us to mess up and pay a day late.Thats their bread and butter.


That is precisely why hundreds of thousands of people become financially "crippled" by the ballooned interest and late fee's - to the point that they can no longer carry the load and cannot pay anymore. The creditors prey on the consumer and actually "count" on them being late by a day or more- just so they can stick their FANGS in and start raping them for every cent they can. They take far more than they originally loaned you, as you pay over time.

Their system is designed specifically to steal as much money as possible from people making little errors. And guess what? They dont even own the money they loan to the consumer. They too are borrowing your loan from banks and private funds. Its not even technically legal for them to be charging penalties and late fee's on money that isnt even real and doesnt belong to them. Its just credit they borrowed from elsewhere.


Anyways, I feel truly sorry for anyone who is sad, angry, and lost enough to actually enjoy threatening hard working struggling people for a living, and then expecting sympathy that their job is so sad and horrible. Its such incredibly bad Karma.


All I can say is - research the crap out of all your rights, and question EVERYTHING. Behind every reason is a cause. And every cause has it's own purpose.


Good luck to everyone trying to navigate their way through the credit system, and put in work towards resolving their debt issues. All those people deserve props for giving a shit enough to do something in an active, constructive direction.


lrhall41

Submitted by TwoWayStreet on Tue, 07/26/2011 - 19:22

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I gonna play the devils advocate....nobody is forced to use a credit card. You sign a card holder agreement and you are subject to the terms. If you cannot afford something by paying cash....dont buy it. We live in a plastic society where everything is sign and go. People dont think prior to buying.


lrhall41

Submitted by SOAPLADY on Wed, 07/27/2011 - 12:36

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