Charge off vs. dicharged in Chapter 7

Discussion in 'Credit Talk' started by cjaj123, Oct 10, 2008.

  1. cjaj123

    cjaj123 New Member

    Hi, I have spent hours searching for the answer to my question and have learned alot for sure, but still don't know what to do! I apologize for posting if this has already been addressed (which I'm sure it has).

    My situation is that I had a loan with a cosigner, due to life happenings I had to file Chapter 7 (2 yrs ago). My cosigner has now been denied a loan due to this loan on his credit report. The problem is that I thought it was discharged in the BK. Experian lists it as 'discharged through Chapter 7 BK/Account charged off' while Transunion says 'charged off as bad debt, profit and loss writeoff'.

    What exactly does this mean? Exp says both discharged and charge off, while trans says charge off. I really want to fix this for my cosigner but can't figure out what to do because I don't really know what the status is, or how a discharged status vs charge off status affects a cosigner.

    Can anyone help?
  2. jlynn

    jlynn Well-Known Member

    A BK'd account can report the status that it was, at the time you filed, but it must also include the notation Included in BK (IIB for short here), and report a -0- balance.

    So, Experian is probably reporting correctly as to the status, but the Transunion report is not.

    I have heard of notations on cosignors that say "discharged in BK of another" - not sure if that still is done anymore.

    Unfortunately, did you realize that your cosignor is likely still on the hook for the balance of that loan? Your discharge would not have discharged their obligation as a cosignor.
  3. cjaj123

    cjaj123 New Member

    I realize my cosigner would still be responsible and I plan on paying the debt because I never want my cosigners to end up with the debt!

    If transunion changes the status to the same as Experian how does that look on his report? Since the debt will be zero will his bank then reconsider his loan or does it look worse because it is charged off? Or if it says 'discharged in BK of another' how does that affect his credit? Better or worse? I didn't know that US bank would come up 2 yrs later. I thought it was discharged and done or I would have tried to make arrangements with them 2 yrs ago.

    Is there any way to help my cosigner immediately? I filed bK for a reason so it's not that I have money to pay the debt, but I have to do something to get my cosigner off the hook. Because I don't have the money, do you think they will make arrangements with me and if I start paying them what I can, will they change the status? Will they negotiate the amount at all or will they just try to get the money from him? I don't see a reason in struggling to pay minimal amounts if it is going to stay on his report as is.

    Why exactly does experian say 'discharged in BK/charged off'? Which one is it? The account was not charged off before the discharge and after the discharge it is discharged so why the 'charge off' at all?

    Thank you so much for the help!

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