Charge Off

[Overmylimit]

I was wondering, don't creditors have to charge off after so much time has passed? I have a lot that have but some have not and it's been over a year.

[treehugger1]

Generally, the accounts will charge off after 180 days. he accounts will still show up on your credit report with the charge-off balance. One of my accounts has been sold, and the OC now shows a charge-off with 0 balance. My credit score went up by 2 points! LOL

[justbroke]

A charge-off is an accounting procedure. It really has nothing to do with your credit report. Usually, after 180 days of not paying, the creditor will write-down or "charge-off" the balance in their accounting.

Generally though, the creditor will update the credit report to show the charge-off. They do this because charge-offs and collections are like the worse things to have on your report. I think it's more punitive than informative.

[Overmylimit]

I'm not really to worried about the credit, I was wondering if a collection agency that is trying to collect for Bank of the West (which is one of them) and they have had the account for 9 months or more...are they really still trying to collect for Bank of the West or themselves at this point..they keep saying they are collecting for the Bank

[justbroke]

I'm not really to worried about the credit, I was wondering if a collection agency that is trying to collect for Bank of the West (which is one of them) and they have had the account for 9 months or more...are they really still trying to collect for Bank of the West or themselves at this point..they keep saying they are collecting for the Bank

Well, alot of them try to say they are collecting on behalf of the original creditor... to avoid looking like a Junk Debt Buyer. Besides, if some random "agency" called collecting a debt, one would want to know who they or the debt represented.

Next time they call, ask them if they own the debt.

[Worked4Citi]

Your debt was "charged off" meaning that you defaulted with no security, so anything you didn't pay the original creditor is out. After 90 days accounts with non-pay status or without any type of agreement are shipped out to be collected at a central collections center. Now depending on if they can skip trace you, find you, contact you. They will continue to service your account and collect on it.

If you continue to ignore collection of your defaulted account, the centralized collection agency will sell to someone else, and consider your account "P&L" (Profit and Loss). It will be noted on your credit report and the company you defaulted with will most likely seek a judgement.

Until they get a BK affirmation, then will stop collected, judgement or P&L status will be reported on your credit bureau report for up to 10 years.

If you have any questions... I know way too much about collections. Let me know if I can help.

[catleg]

BB you da man. Listen to him folks.

Charge off means the bank can no longer pretend the loan is performing.
It's basically meant to prevent accounting fraud .. by the bank itself.
Accounting rules require charge off after 180 days past due, my understanding.
Most of the cards I last paid in Sept/Oct 08 charged off May 2009.
Has nothing to do with the loan's legal status.
Several of the banks claimed loan moves from "collection" to "recovery" at this time. Whatever. If anything, I've gotten a flurry of new CA demand letters but the OC phone calls have dropped way off. Finally!

[All Cash]

Listen to BigBoy folks. He offers correct information.

[Overmylimit]

So I know the money I owe doesn't go away just because it was charged off, I was just wondering how long a few of my Banks were going to service the debt and still not get payments from me. A lot of them have charged off and have gone to various CA's but there are a few Banks that I havent paid in a year that are still trying to collect from me. Would it be because of the size of the loans? They are large amounts

[catleg]

Here's what it looks like from their side, and why there is a law in the first place about when they have to charge it off. (Charge off includes both 180 day charge offs and BK charge offs)

" A change in bankruptcy processing resulted in an improvement in the U.S. Card charge-off rate that is reflected in the May results. The impact was approximately 50 basis points. While our internal guidelines require bankrupt accounts to be charged off within 30 days, our practice had been to charge off customer accounts within 2 to 3 days of receiving notification of bankruptcy. Due in part to an increase in the volume of bankruptcies, we have extended our processing window to improve the efficiency and accuracy of bankruptcy-related charge-off recognition. The new process remains within Capital One’s internal guidelines, as well as FFIEC guidelines that bankrupt accounts must be charged-off within 60 days of notification."

In other words they're gaming their stats to make their portfolio look a little bit less smelly. The unadjusted 9.91% charge off rate is an all time high for them. (from zerohedge.blogspot.com)

http://www.sec.gov/Archives/edgar/data/927628/000119312509130351/dex991.htm

[Overmylimit]

Thanks BigBoy, that was the answer I was looking for!