Proj1423 Posted October 17, 2010 Report Share Posted October 17, 2010 I'm in PA.The OC has charged off a credit card debt of over $20K. The chargeoff happened early this year based on my CR. However, I continue to get quarterly statements where the balance is still accumulating massive amounts of interest (over 20%) and overlimit fees each month. My CR shows the charged off date of early this year and the chargeoff balance from the same time. But it also shows the current balance with the interest charges included which is much higher than the chargeoff balance.It seems to me that they shouldn't be able to do this. I thought I read here that they could only charge 6% interest and no other fees after the account had been charged off. Please tell me I'm remembering this correctly. I tried searching here but I can't seem to find this answer. Link to comment Share on other sites More sharing options...
willingtocope Posted October 17, 2010 Report Share Posted October 17, 2010 Nope. CO is just an accounting term that means :charged against accured income for P&L purposes". Means nothing to you. They still own it, you still owe it, they can still charge penalty and interest (at whatever rate it says in the contract), and they can still try to collect. Link to comment Share on other sites More sharing options...
Proj1423 Posted October 20, 2010 Author Report Share Posted October 20, 2010 Forgive my lack of legal knowledge in this area. If I take a loss of $50 and report it to the IRS, I can still collect $500 on the same debt? Doesn't seem right. Not to say that isn't just the way it is.Assuming that I can't afford this huge lump sum payoff and the OC can't negotiate payments that are even close to affordable, I have to sit back and wait until they sell the debt to a JDB or sue before the 20% interest finally stops?Worst case scenario would be a judgement, right? I'm in PA so they can't garnish and the debt was unsecured so they can't seize. I think.Thank you for all your help. Link to comment Share on other sites More sharing options...
LostMind Posted October 20, 2010 Report Share Posted October 20, 2010 Worst case scenario would be a judgement, right? I'm in PA so they can't garnish and the debt was unsecured so they can't seize. I think..unsecured means nothing once they get a judgment. the only thing protected is exempt assets which is not much.Call a local civil attorney and ask, i'm sure they will confirm this. Link to comment Share on other sites More sharing options...
willingtocope Posted October 20, 2010 Report Share Posted October 20, 2010 Forgive my lack of legal knowledge in this area. If I take a loss of $50 and report it to the IRS, I can still collect $500 on the same debt?Not quite. Usually what thet "charge off" is the interest and penalty...th "income". Big business works on the "accrued" tax basis...claiming income when it is earned rather than when it is collected. When they don't get paid, they have to back the income off their P&L and taxes. When they finally give up trying to collect, they "write off" the principal...the money they "loaned" you that you haven't paid back...and again, adjust their P&L and taxes. Link to comment Share on other sites More sharing options...
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