I have seen mentioned a number of times that a creditor has to charge off an account prior to 180 days. This leads to several questions: 1. How can this be used if it doesn't happen? 2. Where is this requirement specified? 3. Does it apply to both bank and store cc's? 0
My website has a link to FDIC rules for creditors, you will find the chargeoff rules there. Depending on your State's banking and credit laws, you could possibly file against your OC for disclosure.
Thanks WhyChat. 1. Disclosure of what? 2. A quick perusal seems to indicate creditors are allowed flexibility as to when they charge-off a debt. http://www.fdic.gov/regulations/laws/rules/5000-1000.html UNIFORM RETAIL CREDIT CLASSIFICATION AND ACCOUNT MANAGEMENT POLICY â?¢ Closed-end retail loans that become past due 120 cumulative days and open-end retail loans that become past due 180 cumulative days from the contractual due date should be classified Loss and charged off.{2} http://www.fdic.gov/regulations/laws/rules/6500-2750.html Section 605(a)(6)--"Any other adverse item of information which antedates the report by more than seven years." 1. Relation to Other Subsections This section applies to all adverse information that is not covered by section 605(a)(1)--(5). For example, a delinquent account that has neither been placed for collection, nor charged to profit and loss, may be reported for seven years from the date of the last regularly scheduled payment. (Accounts placed for collection or charged to profit and loss may be reported for the time periods stated in section 605(a)(4).)
It depends. For credit reporting purposes, the "charge off" date is 180 days at most. This is in the FCRA. They don't use the term "charge off". It is in the section that discusses when the 7 year reporting clock starts. The FCRA says that the 7 years clocks starts no later than 180 days from the activity that first made the account delinquent. Usually, this start date is the creditor's charge off date. They put a cap of 180 days to prevent a creditor from sitting on it forever. For banks, charge off is an accounting term. It is used to compute the solvancy of a bank. Banks are regulated by federal and state laws (numerous laws and agencies). They have laws that force charge off status in about 90 days. This is to prevent banks from counting non-performing loans as assets. For other businesses, it depends on the laws the regulate the business. For privately held small business, there are few if any rules. The owner is free to decide when to consider an account to be charged off. If they want tax credit for delinquent debts, then they have to follow the tax rules on this subject. For publicly traded companies, there are accounting standards that they are supposed to adhere to. It is the responsibilty of the board of directors to assure that the company they direct is within legal compliance. The SEC, FTC, and other agencies usually enforce the regulations. The auditing companies such as Arthur-Anderson are supposed to double check this and give the books their blessing.
The 180 day banking rule is not flexible, except in cases where the creditor in GOOD FAITH re-ages the account properly. As to "disclosure", it would depend on your State's banking and credit laws. In NY, for instance, (linked under NY on my website) there are provisions for demanding full accounting of fees,charges and procedures.
