I'm in the process of doing a short sale with my home already, my 2nd mortgage is about to charge off. Which it will, i still have time to settle with the next CA. During the short sale process, when it's done. All accounts are wells fargo. Well my question is i have a balance of $5000, which at one point was a credit overdraft account, now a credit line of sorts. Since my credit is already getting dragged through the mud. I've thought about not paying it & basically wait for them to make an offer to settle the account for less than i owe, before it hit's a CA. That would eliminate all my debt more or less. But i am aware slightly since i still have some credit at the time it may help build it back up some. But i already have a chargeoff with wells fargo with my second mortgage, why not just eliminate all the accounts? Is my thinking. Can a debt settlement be done on a overdraft/credit line/ credit card wells fargo.
You have asked the same question in two different ways. In answer to your question, an overdraft line of credit is an unsecured debt (meaning that you have not pledged any specific collateral such as a house or car), and it can be charged off like any other debt (secured or unsecured). Charging off is merely an accounting term which means that the company has closed the account due to borrower delinquency, made an adverse notation on the borrower's credit report, and taken a write-off against the company's taxes due to the "loss" of the money in question. After a debt has charged off, the creditor can still pursue you for payment, by hiring a collection agency to hound you for the money, or by filing a lawsuit in your jurisdiction. Of course with your credit already "shot", it is possible that no lawsuit would ever be filed. Also, you can settle the debt for less than is owed, especially if you wait until it charges off and goes to collections. I defaulted on all my credit cards back in 2009, and after they charged off in November of 2009, I started getting settlement offers from various collection agencies, some as low as 40% of the balance owed. To date, I have not been sued, either. That may be a result of my currently "trashed" credit rating, which would suggest that nothing is to be gained by suing.
