Doesn't a collection or chargeoff need to show a zero balance?? I had a discover card back in 2002 that was charged off and orginal debt owed was 3500 but with whatever they charged over time it shows a balance off 6150 dollars on all 3 reports and it shows the balance and saying collection/chargeoff. I know this is going to fall off in under a year but I think they still figure it in as debt on my reports. Any advice or help would be great.
When something is charged off it will not show zero balance. The company will show the total amount of money including fees that you never paid them and they in turn use that figure as an uncollectable debt with the IRS and thus get a break on income. You still owe them the money and if you paid them they would then have to report to the IRS that they made unexpected money and thus show a zero balance. It is the second party collections that can go on and one and be sold over and over that you have to worry about.
jlynn is correct. Chargeoff is an accounting term. It means that they no longer carry your accounts receivable on their books as an asset. They write it off against a bad debt account. They can, and usually will, still try to collect. When they do, they just write it back on to their books again, reversing the bookkeeping entry they made when they wrote it off. If all of the bad debts were carried as assets, it would make the business look healthier than it is.
It will only show a $0 balance once the account is sold to a collection agency, or JDB (junk debt buyer). If they still hold the account, they can continue to show, and report, the balance due.
I too have a chargeoff with Discover for substantially more than I originally owed. Has anyone ever had any luck doing a pay for deletion with Discover or settling for original amount and getting the full deletion???
