Debit and Charge Off Consolidation – How to Get Rid of Bad Debt and Remove Charge Offs From Your Credit Reports
A charge off is a written statement by a lender that an unpaid balance of the debt is not going to be collected. This usually happens when a debtor becomes very delinquent on a loan. Traditionally, lenders make this announcement at the point of 30 days without any payment in arrears. However, a charge off is also a type of write off. It may not be recorded as an unpaid loan on your credit report but it still has a negative impact on your credit score.
A charge off will not disappear from your credit report. Therefore, you should still attempt to contact the creditor to make arrangements for repayment. If you still haven’t made contact with the creditor, you may find it useful to contact the credit reporting agencies. They have a procedure to follow when reporting a charge off to the relevant agencies. You can also get information from these agencies if you want to sue the creditor.
The first thing you should do is to check with the charge off information on your credit report. For charge offs reported to the three major credit bureaus, you will see a note either saying “paid” or “settled”. These payments will appear as a paid transaction rather than a charge off. You will need to negotiate with the creditors to arrange for future payments.
Many people try to negotiate with the creditors to avoid having to declare a charge off. They are aware that declaring charge off would make the debt difficult to collect and may even result in the creditors not reporting the debt to them anymore. Creditors would rather receive payments from their consumers than forgo future credit.
However, if this approach does not work for you, then you may still want to negotiate. First, stop paying the minimum required payments. Second, write and object to the charges listed on your credit report. Third, negotiate to get the original creditor to agree to lower your interest rate or at least settle it for a lesser amount. Fourth, negotiate to eliminate any late fees and penalties.
To negotiate with your creditors, write a letter stating that you object to the charge of being listed on your credit report. Ask that the charge be taken off your report and that the full amount due is paid. Explain why this charge is an automatic deduction from your credit report. You will probably need to negotiate until the total amount due is satisfied.
If seven years pass since the charge to occur, you might have difficulty removing it from your credit report. Some lenders and seven years are the time it takes for the bureaus to consider your charge off a charged off debt. If you can prove to them that the seven years has passed, they may be willing to remove the charge off from your report. Even if you can prove that it did occur less than seven years ago, some lenders may still consider the charge off as a charge off.
Lenders will consider at least one year of delinquency in collections if the collection was made within this period. Lenders use a standard of two charged off debts for a charge off to be removed from your report. If the second collection was made within this time, then you must prove to your creditors that this second collection was made in response to the first charge off and that you have been trying to make good on the first debt for seven years or more. You will most likely have difficulty getting this type of proof, but it is worth the challenge. Charge-offs do not disappear over seven years because of these requirements.