antipode12

Charge Off consequences

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Hi - I'm in NY.

 

After racking up sizable debt with my ex-fiancee (she: sometimes co-applicant, sometimes authorized user, sometimes just a mooch), we have separated. She refused to contribute $ after the split, so I paid the minimums for as long as I could. (I paid 10s of thousands - she paid zero.)

Since then, the accounts have been unpaid, and now list on the credit report as "charged off".

I have several questions that I hope you can help with.

1) Can the Charge Off get renewed each month? (It "Charge Off" appears monthly on my credit report.)

2) Does "charge-off" mean that the bank no longer holds the debt? (How do I find out who owns the debt?)

3) Does the Statute of Limitations of NY apply, or of the Bank? (I've read very conflicting info, including a NY case from 2010: http://www.nedap.org/hotline/defenses.html)

4) Can I refer the Collection Agencies to my ex-fiancee? (They don't seem to have her new phone or address.)

5) Would referring my ex-fiancee to the Collection Agency "re-start" the 7-year window?

6) If I settle with the Collection Agencies for a lesser sum, does that benefit my credit? Is there any other benefit?

7) Any other ideas? What would you do?

Thanks a ton!

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Hi - I'm in NY.

 

After racking up sizable debt with my ex-fiancee (she: sometimes co-applicant, sometimes authorized user, sometimes just a mooch), we have separated. She refused to contribute $ after the split, so I paid the minimums for as long as I could. (I paid 10s of thousands - she paid zero.)

Since then, the accounts have been unpaid, and now list on the credit report as "charged off".

I have several questions that I hope you can help with.

1) Can the Charge Off get renewed each month? (It "Charge Off" appears monthly on my credit report.)

2) Does "charge-off" mean that the bank no longer holds the debt? (How do I find out who owns the debt?)

3) Does the Statute of Limitations of NY apply, or of the Bank? (I've read very conflicting info, including a NY case from 2010: http://www.nedap.org/hotline/defenses.html)

4) Can I refer the Collection Agencies to my ex-fiancee? (They don't seem to have her new phone or address.)

5) Would referring my ex-fiancee to the Collection Agency "re-start" the 7-year window?

6) If I settle with the Collection Agencies for a lesser sum, does that benefit my credit? Is there any other benefit?

7) Any other ideas? What would you do?

Thanks a ton!

 

1)  The status can be reported monthly as charged off.

 

2)  No.  Charged off is nothing more than an accounting term meaning the account is no longer an asset but has been attributed to their bad debts a liability.  It is an accounting term and nothing more.

 

3)  The SOL of NY applies if that is your state of residence.  Some states have what is known as a borrowing statute where if the state laws as specified in the contract are shorter than the resident state where the suit is filed the party(s) are permitted to "borrow" the shorter SOL from the state listed in the card agreement.

 

4)  You can certainly try on those accounts where she is a co-applicant but I suspect she will ignore them too and the CAs will go after the target most likely to pay.  As an authorized user you cannot.  You would have to sue her yourself to collect on the AU and mooching accounts.

 

5)  No.

 

6)  In the long term:  yes.  Short term:  no.

 

7)  I would try to settle as many accounts as possible and sue her for the monies she should be paying towards the debt she helped rack up.

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Thanks!

 

3) SoL: I've read that a 2010 case in NY shows that the Bank's state is what takes precedence, not the Debtor's.  

 

6) Settlement: what's the long-term advantage?

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Something you did not note was FDCPA 816.  Read that statute, then read the decision again.  it should be clearer to you.  Simply, the statute that affords you the greater protection takes precedence.  If I'm not mistaken, this confusion arises from the Arbitration rules, which gives the creditor the benefit.

 

Reported negative information, reported for up to 7 years, over a period of time "seasons" into your CR.  By this, after say 4 years of reporting, the TL is not hurting you as bad as it did in the beginning. The same applies if you pay the debt off.  This is why you strive to get the TL deleted if you offer to pay off debt.  Most lenders for autos rely mostly on score, which they use to select the lender,  who controls the interest rate.  If score is less than 630, most times they will deny.  If near 630, they may consider, based on overall CR.  Yes, some dealers have lenders who will offer a loan with low scores, but at a higher rate of interest.  No guarantee on this.  Mortgage lenders,  no matter the score, require that all collections show a zero balance or paid, even if barred by statute.

 

Simply, if the debt claimed is legit, within the statute, your best bet is to offer to settle.  Here is where you apply any violations, or other items you can use to offset the amount.  If the collector is a JDB, offer them pennies on the dollar, as that is all they paid for it.  Then, of course you want them to delete the TL.  Yes, the majority will deny this.  Fight them anyway.  More times than not, they will cede and agree to your offer.  Your frist offer will be at the minimum $.25 on the dollar.  They will counter at $.75.  Then, it is back and forth.  You will move up a nickel at a time.  We can guide you through this, if necessary.

 

As to your "X", give them her contact info.  Why should it bother you?  And, as stated by another here, go after her for her share.

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Thanks.

 

Retmar, you noted the FDCPA, but I'm not sure what the connection is.  I'm trying to determine which state SoL would take precedence.  How does the Federal FDCPA factor in? Isn't that about conflicts in statute between a State and the Federal gov? As far as I can tell, that is not about the conflict between state laws.

 

Thoughts?

 

Something you did not note was FDCPA 816.  Read that statute, then read the decision again.  it should be clearer to you.  Simply, the statute that affords you the greater protection takes precedence.  If I'm not mistaken, this confusion arises from the Arbitration rules, which gives the creditor the benefit.

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The state you now reside in is the state whose SOL will apply. The only way the other state would take precedence is if you had moved from that state, then moved back, then, they could ask that the statute be tolled. I do understand (forgot about it) that if the original contract had the arbitration clause, then the state of the lender takes precedence. There was a decision on that some time back. I don't agree with it, will always fight it, if I found myself in that position. If I recall, the bank was in Delaware.

Regarding the FDCPA. Congress wrote the FDCPA due to the continued unethical and many times illegal tactics of collectors. It will never conflict with the states. Many people do not read 816, when they should read the whole statute. Section 816's sole purpose is to protect the consumer rights according to state statutes if they offer greater protection. What you do is look to see what your state says about the collection of debts. Many states just refer to the federal statute and offer no other protection. Others offer different levels of protection, with some having their own FDCPA, such as California. It just helps to now how your state looks at debt collection to help you determine the best path to resolve the situation to your benefit, not theirs.

Also take the time to study your state's procedures, such as court, civil, and any other you feel may apply. Then use them to your advantage. Look up the Truth In Lending Act (TILA). It will describe different things you may want to better understand. Very informative.

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@antipode 12

Check the cardmember agreement for the credit card. If the governing state is DE (3-year SOL), read Portfolio Recovery v. King (NY Court of Appeals). The court ruled that DE's SOL applied to the debt.

http://scholar.google.com/scholar_case?case=8626368307996834885&q=%22choice+of+law%22+AND+%22statute+of+limitations%22+AND+%22credit+card%22&hl=en&as_sdt=4,33

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