how long before they chargeoff

Discussion in 'Credit Talk' started by Momof3, Nov 10, 2000.

  1. Momof3

    Momof3 Well-Known Member

    I would like to know if anyone knows the process on charge offs. When a person becomes deliquent in paying their bills, how long before the companies gives up and charges it off and after they charge this off do they then sell to collection agency?? reasearching for a friend.

    Thanks
     
  2. 777

    777 Guest

    RE: how long before they charg

    There is no set amount of time for a company to charge-off bad debts.
     
  3. Momof3

    Momof3 Well-Known Member

    was hoping for on the average,

    See several years ago my friend up and left her husband(jerk) and bills behind. this was back in"91" and she had 2 cc's at the time. She has always used cash since then, but she recently got married(niceguy) and she is afraid this will come back and haunt her. I told her to pull her reports, I would think they wouldn't be on there since this was 9 years ago. Any thoughts, experiences, and insight?

    Thanks
     
  4. 777

    777 Guest

    RE: was hoping for on the aver

    It depends. No company is under any obligation to charge off a bad debt. But she has been past the seven year mark for reporting delinquent information. The company does not have to charge-off the debt, but they can only report the delinquency for seven years. Our company does charge-offs every month, but the account must be aged over four years.
     
  5. Momof3

    Momof3 Well-Known Member

    RE: was hoping for on the aver

    Thanks, just out of curiousity what company do you work for??
     
  6. lena

    lena Well-Known Member

    RE: was hoping for on the aver

    The company I work for, and several other companies that I know of generally charge the debt off once the acct goes 180-210 days delinquent.
     
  7. Spice

    Spice Guest

    RE: was hoping for on the aver

    Revolving debt is charged off after 210 days. Once an account goes 30 days past due it goes to the in house collections department to the 30 day unit (front end collections) then if the account is not brought current it goes to the next stage of delinquency (60 days). If this repeats the account eventually reaches 180 days past due (6 months). It goes to back end collections and the more agressive collectors. If the account is not collected on by the end of that cycle it reaches 210 days and the bank writes off the debt as uncollectible and will either sell it to an agency or an attorney for pennies on the dollar. The majority of major card issuers work this way.
     
  8. Momof3

    Momof3 Well-Known Member

    Thanks

    Thanks Lena:)
     
  9. Momof3

    Momof3 Well-Known Member

    Thanks

    Thanks Spice, very specific details:)
     
  10. roni

    roni Well-Known Member

    RE: was hoping for on the aver

    Mom,
    I think that they cannot charge it off until 180 days have passed. But there is no law saying they have to charge it off after that time. So it is usually 180's. But my experience with credit card co. (discover) it can take longer. I think reg. collections usually do 180 days.

    roni,
     
  11. Momof3

    Momof3 Well-Known Member

    Thanks Roni

    I told her this was long gone from reports, she was just worried because they are going to be buying a house and she's just didn't know how the system worked. I told her 9 years have passed this is off her reports by now.
     
  12. roni

    roni Well-Known Member

    RE: Thanks Roni

    Listen she should get her reports now. Since she has been avoiding this for 9 years she has no defense if a nasty collector tries to sneak an account on her report late in the game. If she has a report as a reference, she can use that as leverage later. Cleaning a report and keeping it clean with unpaid collections can be a big task. They are always breaking the laws. They could also change dates on her. Does she know all the dates herself. Explain this to her. Wouldnot it be terrible if one of those collectors but a 1992 account on her report now with a 1996 date when she bought it. The cba may lie or report it wrong and say reported since 1996, even though they just reported. They will say whatever the collector pays them to say. I am speaking of an extreme here. But not knowing sometimes puts you at a big disadvantage.
    What do you think Mom?

    roni
     
  13. roni

    roni Well-Known Member

    oops

    That should be 'with a 1996 date when they bought it'. sorry.

    roni.

    roni wrote:
    -------------------------------
    Listen she should get her reports now. Since she has been avoiding this for 9 years she has no defense if a nasty collector tries to sneak an account on her report late in the game. If she has a report as a reference, she can use that as leverage later. Cleaning a report and keeping it clean with unpaid collections can be a big task. They are always breaking the laws. They could also change dates on her. Does she know all the dates herself. Explain this to her. Wouldnot it be terrible if one of those collectors but a 1992 account on her report now with a 1996 date when she bought it. The cba may lie or report it wrong and say reported since 1996, even though they just reported. They will say whatever the collector pays them to say. I am speaking of an extreme here. But not knowing sometimes puts you at a big disadvantage.
    What do you think Mom?

    roni
     
  14. Momof3

    Momof3 Well-Known Member

    RE: Thanks Roni

    Yes I told her to get her reports ASAP. She had two creditcards and stopped paying them in early "91" when she moved out of state, so she has no idea if they ever sent her to collections, charged it off or what. I told her most likely it's not on her reports, but she had better check. Now the worst case scenario would be if someone changes the dates, now I am thinking how could she"prove" these were from "91" ??
     
  15. sam

    sam Well-Known Member

    RE: Thanks Roni

    Charge-offs usually occur on their accounting year end (not the same as physical end of year in many cases). They write off the debt and take the tax break.

    Does that make sense? I was told this by a Bank, maybe other credit companies are different, but if you are like 4-6 months late, and its about to hit end of business year, they will charge it off, and theres some tax advantage of not carrying it over to the next year.

    (im no tax wizard)
     

Share This Page