deanlebo

Charge Off, but OC continues to increase Account Balance

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Hi,

I have a Capital One account that's being reported to all three of my credit reports. I noticed that it was first updated as "Charge-Off" on March of 2007. In the status is says "Account charged off. $919 written off. $1,783 past due as of Jul 2010." My question is, since the debt was written off at $919, can Capital One continue to increase the past due balance every month. As you can see its up to 1783 right now. Do I have grounds to dispute this with the CRA's? If so, what's the best method to do so. Thanks.

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Charge off is just an accounting term that means "charge against income for profit and loss purposes". It has not meaning to the debtor. They still own it, you still owe it, they can continue to charge interest and penalty, and they can still try to collect it.

Now, in your particular case, they have also take a write off..just another accounting term...but it means they may have claimed an income tax "loss" for the period. Again, means nothing to you.

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Hi,

I have a Capital One account that's being reported to all three of my credit reports. I noticed that it was first updated as "Charge-Off" on March of 2007. In the status is says "Account charged off. $919 written off. $1,783 past due as of Jul 2010." My question is, since the debt was written off at $919, can Capital One continue to increase the past due balance every month. As you can see its up to 1783 right now. Do I have grounds to dispute this with the CRA's? If so, what's the best method to do so. Thanks.

Dispute it.

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One thing that I have learned about Capital one is that once they charge off a debt they are pretty good about negotiating payoff for a lower amount. That is lower than the original amount owed and not the increased interest and penalty amount. They typically keep adding that on so they can use it as a negotiation tool later on if you do approach them. They will knock it off coompletely and 2 years after charge of or longer they will typically take about 40% of the debt as a payoff.

Whether a payoff is better for you or just waiting to let it fall off your CR is a personla decision for you. Keep in mind that the 7 year reporting period started the date of your last payment and not the date of the charge off. If that was in say... 2005, the account will come off your report in 2012 and not in 2014 which would be 7 years from the charge off date.

Good luck

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Even if they eventually settle for 40% of origiinal debt, the amount they will report on a 1099 will be the increased charges minus the actual settlement, you will owe income tax on that amount, so while the settlement may be smaller, it could result in a large tax bill to irs unless you are insolvent on date of settlement.

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and bear in mind...even talking to these guys and offering a settlement could start the SOL clock ...

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One thing that I have learned about Capital one is that once they charge off a debt they are pretty good about negotiating payoff for a lower amount. That is lower than the original amount owed and not the increased interest and penalty amount. They typically keep adding that on so they can use it as a negotiation tool later on if you do approach them. They will knock it off coompletely and 2 years after charge of or longer they will typically take about 40% of the debt as a payoff.

Whether a payoff is better for you or just waiting to let it fall off your CR is a personla decision for you. Keep in mind that the 7 year reporting period started the date of your last payment and not the date of the charge off. If that was in say... 2005, the account will come off your report in 2012 and not in 2014 which would be 7 years from the charge off date.

Good luck

ChrisT, have you had any luck with Capital One in terms of removing the "Charge-Off" status in your credit reports. The reason I'm asking is because I'm in the process of securing a FHA loan. Right now my mid score is floating right above 620. I need to pay off Capital One in order to qualify the loan, but I'm afraid that if I settle it'll drop my score below the 620 mark and further disqualify me from the loan. Any help would be very much appreciated.

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ChrisT, have you had any luck with Capital One in terms of removing the "Charge-Off" status in your credit reports. The reason I'm asking is because I'm in the process of securing a FHA loan. Right now my mid score is floating right above 620. I need to pay off Capital One in order to qualify the loan, but I'm afraid that if I settle it'll drop my score below the 620 mark and further disqualify me from the loan. Any help would be very much appreciated.

Also, Capital One has sent the debt to a law firm and they won't directly deal with me. Can the law firm negotiate in behalf of Capital One to get my credit report updated?

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