charge off account

There are times when creditors are not successful to collect the past debts from the consumers even after trying several times. In such an occasion, they will consider the debt as charge-off and hence they will stop all collection efforts. After a long time, you will find that some junk debt buyer or a collection agency is contacting you for the same account. This happens because creditors oftentimes sell the charge-off account to collection agencies and junk debt buyers for pennies on the dollar. These collection agencies will later contact the debtor for the same debt by adding on outrageous interests and fees.

Collection agencies have their own strategies of collecting debts from the consumers. It is important that you check the statute of limitations in your state before you start dealing with the collection agencies. If you find out that the statute of limitations of your state has expired for the said debt, then you can send a dispute letter to the collection agency informing them about the expiry of the SOL. This will stop them from taking any legal actions against you.

bad credit repair

If the charged off debt is more than seven years old, then it has to be automatically removed from your credit report as per the Fair Credit Reporting Act. If you see a past debt showing up on your credit report that is more than seven years old, contact the credit bureau that is reporting this negative item and they will remove it. Once the negative item is removed off your credit report, the collection agency cannot put it back on your report. Just in case, if the collection agency is contacting you for the same debt even after it is removed from your credit report, then you can take strict legal actions against them.

Many people believe that paying off a debt to the collection agency will remove the charge-off status from their credit report. This is not true. Even through the debt is too old and is past the statute of limitations, if you consider paying it back, it will show as paid and the charge-off status will still remain on your credit report. At least, its still better than not paying it back.

Helpful Article:

http://www.consumer.ftc.gov/articles/0058-credit-repair-how-help-yourself

This entry was posted on Wednesday, April 10th, 2013 at 9:06 am and is filed under Bad Credit. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.