HELOC Chargeoff

[rck3]

So I had a quick question. Last month I found out my autodrafts were canceled. I called USAA and spoke to someone who was going to reset them up (I am keeping my house/cars). They said all 3 were set up and would do a manual draft for that month. Well I kept an eye out this month to be sure. My 2 autos were drafted but not my heloc so I called. The person said they can not do the heloc and I need to fill out a form. The loan is now in chargeoff status she said because the payment last month never was drafted and now this month has not been paid either. What does that actually mean that it is in chargeoff status? Should I dispute that or does it not really matter. I know they screwed up and I am sure their records will show but I am still in BK (Actually discharge is today). I know I should talk to my lawyer but it's too late right now.

[tcreegan]

Hi rck3,

Charge off is a bookkeeping term for taking a loss on an asset/receivable/inventory/whatever and taking it off the books. It is just bookkeeping, the debt/loan doesn't actually go away, but it usually does mean that the debt/loan is going to be either assigned or sold to a debt collection company.

BUT...that being said, it would be highly unusual for a loan to be charged off for a couple late payments. I suspect the lender has other reasons to let go of the debt, possibly the BK discharge, maybe something else. Might be time for a discreet inquiry...

Tom in Colo