I have a visa card through US Bank. About 1 1/2 years ago I became 110 days past due. They then placed me in a program with a lower interest rate. Since August of 2008, I have made monthly payments under that "program" in all but 2 months. They last missed payment was 3 months ago. My balance has gone down $1,000 in the last year They recently they told me if I missed this months payment did not payment they would charge off my account. Is this possible, or is this a mere threat from an over zealous collections agent. Although I am making the monthly payments under the program, I still have a past due balance that has existed since August 2008. Would they charge off my account for missing another payment, if I have made 14 out of 16 payments and if I have made the last 2 payments.
They might. They may apply your payments to the current payment and keep carrying the missed one as longer and longer past due. Are you working with a collections agency or the original creditor?
I am dealing with the original creditor. And they did say they were applying my current payment to the current payment and carrying the past due amount as a past due. Seems I may be one missed payment away from a charge off. At this point, I would rather not take a charge off on my credit rating. But, it is good to know the tax benefits should it come to that. Hopefully, I can make the current payments and pay off the past due.
I think you misunderstood, mojo.... the tax benefits are for the creditor who writes off your debt as uncollectable. There is no tax benefit to you for having it charged off...
Re: I think you misunderstood, mojo.... In fact you would get a 10-99 reporting this as income to report on your taxes.
Not exactly. You get a 1099 if and when.... the debt is settled or forgiven but that's not the same as it being charged off. Charging off is an accounting entry for the creditor, but you still owe the debt after it charges off and you will not receive a 1099 unless and until you settle it.
