naissurmk2MN Posted February 28, 2012 Report Share Posted February 28, 2012 Hello all,After getting summons from attorney representing a local MN credit union I've been doing a lot of research on this website. I came across a lot of useful information, but didn't really see anybody asking the this question...Can OC write off debt and then still come after you on the same account?Is it legal?Is there a way to legally ask for this information and is OC obligated by law to provide the info? Any input will be greatly appreciated.Thanks Link to comment Share on other sites More sharing options...
Guest usctrojanalum Posted February 28, 2012 Report Share Posted February 28, 2012 Can OC write off debt and then still come after you on the same account?Yes.Is it legal?Yes. Link to comment Share on other sites More sharing options...
1stStep Posted February 28, 2012 Report Share Posted February 28, 2012 Yes to all of your questions... charging off means they are taking it off their list of active loans, but still retain the right to come after your for any amount due. Link to comment Share on other sites More sharing options...
Guest usctrojanalum Posted February 28, 2012 Report Share Posted February 28, 2012 They can also buy insurance against the loans, HELOC's, and credit they have extended to people who are not as credit worthy and hedge their bet against the borrower defaulting. It's the main reason why AIG almost sank the entire financial sector in 2008. Link to comment Share on other sites More sharing options...
naissurmk2MN Posted February 28, 2012 Author Report Share Posted February 28, 2012 Just to make sure that I understand this correctly:The bank (credit union in my case) CAN write off my bad loan AND come after me to possibly collect on the defaulted loan?Isn't this a little unfair - they are benefiting twice in this case? Theoretically they can write off all of the bad loans for the year and then collect on a portion of them the following year as a profit... Link to comment Share on other sites More sharing options...
willingtocope Posted February 28, 2012 Report Share Posted February 28, 2012 Banks and CUs work on the accrual accounting method. This means they count income when it is earned, as opposed to when it is collected. When they charge off a loan, its a "charge against income for accounting purposes". Its not double dipping... Link to comment Share on other sites More sharing options...
legaleagle Posted February 28, 2012 Report Share Posted February 28, 2012 If they eventually do collect anything, that money has to go on the books as profit if they wrote off the account. It's like a reversal of the accounting entry. Link to comment Share on other sites More sharing options...
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