charge off question

[crashzx]

Is it true that when the original creditor charges off the amount it is then sold to an outside debt collector or agency?? Is it kept inside the original creditor??
Thanks

[BigJohn]

Is it true that when the original creditor charges off the amount it is then sold to an outside debt collector or agency?? Is it kept inside the original creditor??
Thanks

Charge off is a creditor's accounting practice which is reflected back to the consumer by a lowering of the creditor's credit score (generally).

As for selling the debt, each creditor handles the selling of the debt, that is if they do sell debts, according to how they run their own business.

[treehugger1]

John is correct. I'll add a bit here. Just because an acount is charged off does not mean that the OC will sell or assign the debt to outside collections. I have a Cap1 account that charged off perhaps a year ago, and Cap1 still owns and controls the account. They occasionally send the debt out to CAs but after I DV them, the account goes back to CAP1.

As BJ pointed out, a charge off is just an accounting move to get the account off the books. In other words, the account can no longer be a part of the "acounts receivable" part of a ledger. But, just because they charged it off doe not forgive the debt that you owe. I have over a dozen accounts that have charged off and only one account was actually sold to a JDB.

[crashzx]

Ok...I knew I was not forgiven..I was just wandering how to know the debt has been sold to a "bottom feeder" per say. Just wondering about the settlment offers i am about to offer some and wondering how low to go. Should i let them give the offer? Or would it be to late at this point?

To be honest..I have found that we might make enough now that we have totaly restructured our spending and budget to possibly try at least. All bills are caught up to current and we have money in the bank and acording to the budget will have more to come as the bills cycle back to 1 month instead of several at a time on each one. No unsecured payments to cc's though. I could still and plan on filing but just thinking out loud.
Thanks

[BigJohn]

Ok...I knew I was not forgiven..I was just wandering how to know the debt has been sold to a "bottom feeder" per say. Just wondering about the settlment offers i am about to offer some and wondering how low to go. Should i let them give the offer? Or would it be to late at this point?

To be honest..I have found that we might make enough now that we have totaly restructured our spending and budget to possibly try at least. All bills are caught up to current and we have money in the bank and acording to the budget will have more to come as the bills cycle back to 1 month instead of several at a time on each one. No unsecured payments to cc's though. I could still and plan on filing but just thinking out loud.
Thanks

If the original creditor sells the debt, the original creditor will send you a letter stating such and you should get a letter from the buyer saying they are the new owner of the debt.

Probably best to see what offer they will make. But then, if you are getting current on your other debts, you might want to intervene on this debt. The reason why I am saying this is that a charge off might cause your credit score to drop, that is if you are concerned about that.

[crashzx]

Oh I am only current on me secured debt (house, car, utilities)... not my unsecured. I have looked my credit report over and ALL of my unsecured has been charged off. I am thinking of gong ahead with the bk because it will be awesome if i can dump the unsecured. We would almost be on easy street. Liike I said with the new budget in place now there is money left over and it will only get better as the bills cycle back to just 1 month instead of 2-3 each like i just paid.

[Jammed]

I thought when a CC was charged-off a 1099-C (cancellation of debt form) would be sent to the indiviudal to make the amount charged off taxable. If the person is getting charged taxes on the charged-off amount, how can the CC or a CA continue to try to recover the amount?

[wickedlate]

I thought when a CC was charged-off a 1099-C (cancellation of debt form) would be sent to the indiviudal to make the amount charged off taxable. If the person is getting charged taxes on the charged-off amount, how can the CC or a CA continue to try to recover the amount?

The 1099 is sent when you settle for less than was owed and I think it has to be over $600. Correct me if I am wrong.

[Jammed]

Thanks for the great info BigBoy2U!

[howdidithappen]

What is the Statue of Limitations on collecting debts? Does it matter what type of debt it is, e.g. medical expense, credit card, etc.?

[BigJohn]

What is the Statue of Limitations on collecting debts? Does it matter what type of debt it is, e.g. medical expense, credit card, etc.?

Each State is different and each State has different rules. What works for one State may not work for another State. There is a sticky in this section which talks about this very subject.

[howdidithappen]

Thanks I looked at it but honestly couldn't understand it - where can I find out the definition of those terms used?

[ForumReader]

Just to make sure I understand this, for people filing CH 7 and their credit cards having been charged off before filing for CH7 and being discharged, these 1099s won't be issued by these creditors when it is time to file tax returns?