Just spent a lot of time on the phones with my credit card companies on how to count. Maybe this will help some of you. When figuring how to calculate the six month charge off period, Citi said that 150 days is six months. I said no, 180 days is six months. They said they don't count from your first missed payment, nor do they count from the date of your last payment. They start counting from the day of your last payment before you first default, then if you make a payment, they toll the counting while you are making payments. If you stop making payments, they start counting again where they left off. FirstUSA, Citi and Merrick are all doing this to me. In other words it goes to the collection agency or the attorney for suit after 150 days, not 180. So far, it appears that MBNA started the clock again because I made some payments, so I am only two months behind there. But, the other three counted 150 days from the original default, after I was unable to keep up with the hardship programs. I thought they would cut me some slack for at least trying, but I guess not. Not looking for any answers, just making an observation.
I've actually spent some time researching the charge off issue because it comes up from time to time in our business. I haven't found much definitive documentation, so if anybody else can site some legal opinions or actual statutes, that would be helpful. Anyway, banking regulations require that institutions charge off open accounts at no later than 180 days past due. I have found a few exceptions where banks can keep an account on the books for 210 days. This charge off regulation is used so that there is uniformity in judging the financial health of a banking institutions. For example, if a bank continues to carry a deliquent account on its books for one year, it can inflate its earnings and mask its bad debt. Although the 180 day period is standard, regulators encourage institutions to charge off deliquent accounts as soon as they deem the money to be uncollectible. This could be much sooner than 180 days. It's really up to the financial institution. As I said earlier, this is my understanding of what I have researched. If others know of specific regulations or laws, please let me know.
