mamapinson Posted January 8, 2006 Report Share Posted January 8, 2006 Need advice please.I have a chargeoff from capital one auto on my cedit report.Let a car go back that we owed 8000 on, they sold it for 4000,leaving a balance of 4000.This was 4 yrs ago.Applied for a construction loan,was told this would have to be paid off first.Te only thing capital one will tell me,is that it was charged off as bad debt.Credit report states chared off,but says balance 4000.I need the balance to state 0.Disputed it on credit report,and it came back as verified.What can I do?Thanks Link to comment Share on other sites More sharing options...
mamapinson Posted January 9, 2006 Author Report Share Posted January 9, 2006 Balace owed was 8200,when we let the car go back.They sold the car for 4000.Credit report states,4200 written off,but under balance it says 4200(shouldnt balance state o,since it was written off).I called them this morning,the rep told me that I would now have to pay 8900.I told them they were crazy! He said he would settle for 5500,today.This is a debt from 2002.They cant garnish my wages or sue,because im on disability.Looks like they would work with you better than that. Link to comment Share on other sites More sharing options...
willingtocope Posted January 9, 2006 Report Share Posted January 9, 2006 Sorry..."charge off" and "written off" are two different things. CO is just an accounting term that means "charged against income for IRS purposes". They can basically keep it on their books for a long time and let it continue to charge interest and penalties.If its still owned by Crap 1, you've got two choices:1. Reach a settlement with them. Be sure to do it all in writing and make sure that they either delete their entry on your credit reports, or set the balance to $0. This won't be easy, and they'll want all the money in one chunk. Obviously, you'd like to try get them to take the origianl amount rather than the inflated balance they're quoting now.2. Call them and demand a 1099c for the charged off balance. Now I need to tell you up front that this is just a theory I'm suggesting, and I don't have any proof at this time that they'll play along. But, if they do, then by law, they must set their balance to $0 and change the status to "written off". You will have to pay taxes on the amount they WO, but that better than any settlement you might get with them. But, I don't know if this will satisfy your construction loan requirements, so you might check with your lender on that. Link to comment Share on other sites More sharing options...
mamapinson Posted January 9, 2006 Author Report Share Posted January 9, 2006 iT IS STILL WITH capital one,on the credit report,it states status:account charged off/past due 90 days.$4200.00 written off. account history:charge off as of nov 2003.Let me know if you think it was written off or charged off.Thanks Link to comment Share on other sites More sharing options...
willingtocope Posted January 9, 2006 Report Share Posted January 9, 2006 Well, if it does say $4200 written off, then that makes my second suggestion that much more viable. They've already noted that they've decided that $4200 is uncollectable, and you should be able to demand a 1099c. Again, just a suggestion...but I'd be really curious to see how this would play out. I don't think calling them and demanding a 1099c would hurt you in any way...worse thing that could happen is they'd say no and you'd be back where you started. Link to comment Share on other sites More sharing options...
mamapinson Posted January 9, 2006 Author Report Share Posted January 9, 2006 OH BOY! IVE STIRRED THEM UP! They said that it was not written off and I WAS NOT get a 1099c,THAT THEY WOULD collect this debt.Told me to dispute written off in credit report with cra's.I ask for them to send the original contract to me,and papers from when they sold the car.He said that until I paid something on this account,that he wasnt putting anything into it.He said it would be turned over to a ca.Told me not to call back until I decided to pay.Thanks Link to comment Share on other sites More sharing options...
willingtocope Posted January 9, 2006 Report Share Posted January 9, 2006 Well, I'm sorry if this has caused any problems. Like I said, I don't think you're any worse off than you were. It really isn't up to you to dispute "written off"...that's what they've said, and if they didn't mean it, they shouldn't have said it.I don't know how agressive you want to be with this, but the requirements for them to issue a 1099c are outlined in:http://www.irs.gov/pub/irs-pdf/i1099ac.pdfIt would probably be up to a court to decide if a repo requires them to issue a 1099c.If you want to continue this, I'd suggest the next step would be to write a letter to the OC's executive offices quoting the IRS and demanding a 1099c. The phone monkey's aren't going to help... Link to comment Share on other sites More sharing options...
mamapinson Posted January 9, 2006 Author Report Share Posted January 9, 2006 No problem,I appreciate you trying to help.After reading that article.I know that if they use it as a write off for a repo,they have to file a 1099c,and furnish me with a copy,but according to them it is a charge off,that they are still trying to collect on,so would they have to file a 1099c?Why would a company just leave this set and not use it as a tax write off,and file a 1099c.They know that I draw ssdi,and there is no way they can collect.He told me that I would have to dispute it on my credit report,and the account states verified 2005 on my report.If they did write it off,can they still collect?I know this is confusing,sorry.Thanks Link to comment Share on other sites More sharing options...
willingtocope Posted January 9, 2006 Report Share Posted January 9, 2006 Well...the answer is just as confusing. Under the old IRS rules, a creditor could keep a "charge off" on their books for 2, 3, or 7 years depending on their accounting practices. They keep the CO going so that it can generate more accrued income on their books. So, how long they keep it around depends on how they want their phoney profit and loss to look. When they need a tax deduction, they change to CO to a WO and claim the "loss".It would appear, however, that the IRS issued new rules in 2005 that establishes guidelines for when they have to actually write it off as a bad debt. It still looks like they can keep it around for awhile, but if you can get them to issue the 1099c, then they have to write it off. Link to comment Share on other sites More sharing options...
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