Charged Off Debt and Credit Rating Advice - The Bills.com Blog

If I elected to use Bills.com to lower my debt and start getting me out of credit card debt, what will happen to my credit score? Does it show as a negative? Will it stay on my credit history for seven years or more?

Bruce – It depends what debt consolidation option you choose. You should apply and then get a free consultation to determine what is the best option for you (debt consolidation loan, credit counseling, debt settlement): Very quickly, if you want a free debt consultation with one of Bill's approved debt help partners, click here: https://www.bills.com/debthelp/debt

We purchased an IBM computer through Staples in 1998. We had so many issues with it within the first 6 months, I wanted to return it. Staples said I would have to go through IBM, whose support system stinks! They said we could return it for a $50.00 credit. (We are talking about a computer less than a year old!) We opted to throw it away after investing our own money in it to repair it. Our account through Staples is a charge off, once again since 1998, and w/in the past two weeks, we have had an agency calling us reference an amount owed of $2500.00! (They must have bought the bill from someone.) The original charge off was $1600.00, is this legal? They also made threatening statements, such as "If you want to take care of this with out any problems, you need to call today." Can someone give any advise?

I have a credit card that has been charged off for over a year now and its about 9,000.00. I dont have the money to pay it because it is in collections. the card is 5,000 but they added the rest as interest. any advice for me?

Sure, you can always try to negotiate a settlement on the charge-off account and see if you can settle the account for much less that the current face value. Typically, this will take a lump sum, but check out debt settlement online (or the section at Bills.com).

I need to know whether or not I am required to continue to make a payment to an auto finance company after they have reported a charge-off of this debt to all three credit bureaus. I have made payments of $100 instead of $350 from July through December. The car was totalled in June of 2007. I didn't have gap insurance and I now have another car which I have to make payments and have insurance on. Thank you, Betty

You need to know that even if a debt is charged off, you are still liable to pay it back because the creditor will still hold you responsible for it. Remember that debts are allowed to be reported on your credit up to 7 years (this varies from state to state) till the statute of limitations kicks in. I would suggest that you contac the creditor and negotiate a lower one time settlement and pay off the debt all together.

I also had an account with a balance of $5,000 charged off in Sept 2002 after my husband lost a job. No payments were made on it since May 2002. The creditor, Capital One, continues to charge current monthly interest 5-1/2 yrs after charge-off, creating a balance owing of $12,000. This would seem to be against GAAP, rather unfair, or even illegal. All other credit is perfect. It has caused me to be turned down for an auto loan recently. I wrote to the FTC and to MSNBC, no responses. What should I do?

while it may seem unfair (and if you are overdue, they are likely charging you over-limit fees and late fees monthly as well)... unfortunately there is nothing stopping them from continuing to accrue interest and fees on the account. what they may be limited by is the statute of limitations on your account, and while it will negatively impact your credit rating... there is a chance that they cannot sue you to collect on the debts. check out the blog on statute of limitations (you can email me back if you want your specific state's limit). http://www.bills.com/blog/expiration-of-statute-of-limitations good luck.

I sought the help of CreditGuard of America in 2007 I set up a repayment plan for my creditors and have made those payments successfully for one year now. One of the creditors Barclay's MC/Visa agreed to the repayment plan has accepted payment's for almost a year then decides to charge off the debt. They have now sent the debt to Encore collection agency. Creditguard statements reflect that I owe Barclay $726.00, Encore states I owe $1624.00. What are my rights? Can Barclay and Encore make me pay $1624.00? Barclay is still an active creditor on my Creditguard report.

CreditGuard should have records of all the payment arrangements that you had reached with Barclays in their records. You will need to get statements from both the parties and reconcile them. You will also need to look at your credit reports to see if any payment activity was reported there. YOu can ask for a debt validation letter, where in the collection agency will verify the debt and give you a breakdown of how they reached that number ($1624).

I had to voluntarily turned in my car I leased from GMAC it was a four year lease I made my payment every month for 18 months, then my husband lost his job of 15 years and is still looking for employment GMAC told me my car would be taken to auction and sold and I would be responsible for the balance if there was a difference, well, I owed $23,000 on the remainder of the lease they sold the car for $25,000, they made a profit of $2,000, I am now getting letters stating the I still owe the $23,000 and they want me to pay it. My credit report shows a charge off on this account am I still responsible to pay for something that I know longer have if I could afford the $23,000 I never would have turned my car back in. Any suggestions. thanks

If you have proof of the sale, you should dispute the item on your credit report. You can find a guide to dispute errors on credit reports here: http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre21.shtm

We have fallen behind due to the foreclosure mess. We will be coming into some money soon- and would like to pay back all of our debts that have been charged off. Should we hire a company to help us do this? Should we try to negotiate for lower amounts? What is the best advise? Thanks

Please take a look at this article on our debt help section of the blog: http://www.bills.com/blog/debt-settlement-advice-and-tips/.

I live in Colorado. A bill that I owe came off my credit report it went pass the 7 years. I am still responsible to pay. I got a bill from an attorney about this bill. What can they do.

What you are referring to is the statute of limitations on that debt having expired. Keep in mind that the creditor can and will try to collect on the debt even though the statute may have passed, what it means though is that if ever the creditor files a suit against you, the judge will dismiss the case because of the fact that the statute has expired. If you would you want to make sure, write a letter requesting a validation on the debt and also the last payment date on the debt. In any case, do not send even a partial payment to them as this will reset the statute of limitations yet again.

i am about to stop paying on one (at&t universal card) of 5 credit cards with a $7200 balance and just let the credit card company write it off. i just cannot afford to keep paying it and they won't work with my to lower my interest rate. what can i expect from them in terms of trying to get their money from me (garnish wages, savings, etc)? I live in texas.

With the homestead and wage protection in the state of Texas, the only thing I can think of is that, if you have any property apart from your primary residence, they might try to get a lien on it. Another thing, although rarely seen happening, is that they might try to garnish your bank account. Of course, you should never forget the damage that it will do to your credit profile.

I have a vehicle charge off that's been sold half a dozen times since it was charged off seven years ago. It dropped off my credit reports, but the current debt collector said they put it back on? What can I do legally? Should I settle with them? A auto finance person told me not to do it.

I think you have two considerations: 1. your statute of limitations (do you have to pay anything); and 2. your credit report. Research the statute of limitations in your state. You can check out: www.bills.com/collection-laws or other sites. If it really has been over 7 years since your last payment, then depending on your state you may be free of getting sued. In this case, send the collector a debt validation letter and and cease and desist letter. You can also send a letter to the credit bureaus that it has been seven plus years since that account had any activity and consequently should drop off of your credit report. You can pull a free tri-merge credit report by clicking on the credit report tab of the Bills.com savings center (or search credit report) or you can go to www.annualcreditreport.com Good luck.

I was told that 3 of my credits cards would be charged off in February of 2009.How long would it take to improve my credit report.Would taking out a secured card help?

Charge offs really hurt your credit bad, these marks can stay on your report for 7 years or more. As time passes, your credit improve. There is no set timeline for this. Yes, getting a secured credit card might help, but nothing can help you recover your credit in the short term. If you have any balance on these charge off accounts, you should pay them off as unpaid charge offs look worse that paid ones. For more tips on credit please read through http://www.bills.com/credit/.

I have a car that was charged off in January 2006 I live in Louisiana, but I purchased the car in Texas. Which statute of limitations applies?

Under written credit contracts such as car loans, mortgages, and so forth, creditors retain the right to decide which state to sue in. Expect creditors to choose the state with the longest statute of limitations and the greates amount of award.

My wife and I used several credit cards to fund a real estate business that we shut down due to insolvency. The business credit card debt we inherited exceeds $110,000. We were told that we were personally liable for the bdebt as signors so we moved the balances to personal credit cards on no interest balance transfers and other promotions. Those promotions are about to end, and we have a monthly debt payment obligation of $3,000. It takes a sizable effort to keep paying these paymts. What can happen if we stop paying? Do we go to court? Is there public records? are we sued? Could we lose our home or cars? Or do we just have charge offs to deal with for 7 years. I mean our credit score was in mid to high 700's for years to the point of gaining all this debt. Thanks for feedback.

You have a daunting credit card balance, but if you develop a plan and stick with it, you can handle it. You have four options: credit counseling, which may be able to negotiate interest rate concessions, or debt settlement, which cuts the actual debt by negotiating a smaller balance, or a debt consolidation loan which is probably not what you need, or bankruptcy. You can find the answers to most of your specific questions in Collections Agencies, Collections Laws and Your State's Statute of Limitations.