Hello, I had a HELOC with one of the major banks. Last year due to some income changes I was unable to make payments. Then one day, I contacted the bank and they told me that my load has been charged off and it has been sent to 3rd party to be handled. Not sure what this means because I have not received a call from this other institute they are referring to and they can't find my account when I call them. In any case, I decided to pull my credit report and found this: Status: Paid, Closed. Date Opened: 03/2007 Date of Status: 11/2011 Reported Since: 04/2007 Last Reported Date: 11/2011 Type: Mortgage Terms: 15 Years Monthly Payment: $0 Credit Limit: $118,100 High Balance: N/A Recent Balance: N/A Recent Payment: N/A Payment History: 2011 Nov: 150 2011 Oct: 120 2011 SEP: 90 2011 AUG: 60 2011 JUL: 30 2011 JUN: OK ... Rest is set to OK going back to April 2007. I am assuming because I was never late on any of my payments. I am wondering what the status "Paid, Closed." mean. Does this mean it will not reflect bad on my credit? If the 3rd party that the bank referred my loan to is a collection agency what does this mean? Not sure what to expect.
Sounds like this should be listed as a charge-off on your credit reports, so it's strange that it's simply reported as paid and closed. Generally how this works is the debt is charged off, sold to a CA, and then the CA will pursue you to collect the debt. Once it's sold by the OC, it should be reported as a charge-off on your credit reports with a $0 balance. The CA can then report it as a collection as well.
Thanks so much JoshuaHeckathorn for your reply. So does this mean it will not reflect as bad on my credit? Meaning, I will take a hit on the 30, 60, 90, 120, 150 late payment but not on the rest of the amount since it shows as paid? What is CA and OC you are refering to? Thanks.
Yes, a Paid/Closed notation isn't a negative mark unless it's a paid/closed collection or charge-off. Of course, the late pays will hurt your FICO scores though. Also, OC stands for Original Creditor and CA stands for collection agency.
Thanks for the reply. I will take a late payment credit hit over a collection or charge-off hit. I guess I got lucky unless they some how figure out and update the status.
Yea, I would definitely take the late pays too! Just keep in mind that the CA will probably get around to handling your account at some point. I doubt a CA would take on a $100K plus debt and then just forget about it, but you never know. The fact that it reports as "paid" is very interesting.
Yeah, I am sure they will get around to my account. It's been almost 3 months since my account was referred to CA. I have been reading up on how to deal with the CAs and what my rights. So I can be better prepared for their call(s). Thanks for all your help.
You're welcome. Good to hear that you've been reading up and preparing yourself. You'll be leaps and bounds ahead of most people when you do get that first letter or call. Keep us posted on how everything plays out.
