Friday, March 28, 2014
Capital One Charge Off During Credit Counseling
Lee,
I became unemployed and fell behind on bills. The last priority was credit cards.I talked and worked with these companies the whole time. Luckily, I became employed once again. I joined a legitimate credit counseling service to setup payments. Capital One accepted the counseling services agreement. I have been making payments for a number of months on time and without issue. I recently checked a copy of my credit report, one of the free ones we are entitled to each year. I noticed that Capital One had reported my account as charged off. I called them to confirm this and the representative I spoke with said that was indeed the case. I inquired why it was charged off when I was on an agreement repayment plan. She really had no answer for that but said that there was nothing she could do about it.
I am in a repayment plan for an account I have already been charged off on. Should I stop the payment agreement? Is there any mechanism or circumstance in which the credit card company can recall my debt? Is there anything I can do to urge them to do this? Why and under what authority are they still accepting my payments if indeed my account has been charged off? Should I not be entitled to a full und of these payments?
What I would like to happen is for the credit card company to recall the debt so that I can pay it off and for it not to appear as a charge off on my credit report. Any thoughts, ideas or suggestions would be greatly appreciated.
Robert,
I think most of your questions will be answered by me explaining how a charge off works. When a credit card company charges off your account, it generally sends the account to the companys collection department or sells it to a third party agency. Charge offs occur without fail once you go 180 days without making a payment. A charge off does not mean that the company has discharged the debt and you no longer owe it. Capital One still owns your debt and you still owe it. It just appears in a different place on the companys profit and loss statement this year.
Capital One is still accepting payments because they still own the account. They dont owe you a und because you still owe the debt, regardless of how the debt appears in the company paperwork or on your credit report. Sounds harsh, I know, and I dont mean to be. Just trying to explain how the system works.
The company cant "recall" the debt in the sense that they can retrieve it from a third party because it never went to a third party. They can remove the charge off from your credit report, no matter what they say. Any company with a contract to report information to the credit bureaus has the right to modify or delete that information. Its unlikely, however, that Capital One would modify your credit report and remove the charge off. Not only is it accurate, but theyre receiving regular payments from you. What incentive do they have to modify the account? None.
Thats not to say that you should stop paying the credit card company. Your regular payments are the only thing preventing that charged off account from being turned over to a collection agency. If your account were to get turned over to a collection agency, the collection agency would make yet another note of the debt on your credit report and your credit would suffer further.
Original creditors like Capital One typically only modify credit information in the event they made a mistake. Even if you were to stop paying and offer to resume payments in exchange for a removal of the charge off, the company is more likely to sue you than to remove the charge off from your credit report.
Per federal law, the charge off will disappear on its own 7 years from the date it was charged off. Unfortunately, the charge off doesnt disappear after you pay off the debt in its entirety. The credit card company is required by law to update your credit report to lect the debt was paid once you pay it off. A paid charge off, however, is just as bad for your credit score as an unpaid charge off.
Its a shame that responsible people such as yourself who try to do the right thing and pay their bills have to suffer the same consequences they would have suffered had they simply left the debt alone. You have a small advantage in the sense that you dont have to deal with a collection agency damaging your credit report and harassing you all day and night.
So grit your teeth and keep making those payments until the debt is paid off. The older it gets, the less negative impact it will have on your credit scores.
Now, if you never stopped making payments on the account, it should not have been charged off – regardless of the fact that you were enrolled in credit counseling. If that were the case, the charge off is a legitimate error that Capital One has to address. In that case, I recommend you get the name and contact information for a senior account manager and send a polished, professional business letter explaining that your account was charged off in error and ask that he remedy the situation. Letters always seem to work much better than telephone calls. Best of luck to you.
Lee
Thursday, March 6, 2014
What Happens During a Foreclosure
Foreclosure. It is a word dreaded by that a lot of homeowners across America. It conjures up images of having your home repossessed, disruption to your sector, the stress of complex, even the threat going through homelessness. But if you are facing foreclosure, you need to be aware what happens during a foreclosure additionally your rights and obligations.
Foreclosure occurs when is just not any pay your mortgage and his awesome holder of the title to your dwelling, i. e, the bank or title company, tells you that dont have to have the right to live in your home and that you should move out. What transpires? What do you do?
The Foreclosure Process
Presumably, the notice of foreclosure has not arrived your own house without warning. What happens during foreclosed is a long process that began after you started missing mortgage premiums. After 90 days a good year of being in default, your lender will give back a letter stating that foreclosure beginnings unless you from the missing payments. Your lender ought to file a "notice of default" by means of local courthouse. If you you shouldnt respond or satisfy hard lender, a date for any public sale will end up being set. After the sales, you will face eviction.
Hopefully, when you fell behind with your payments you immediately acknowledged your lender and started a dialogue. Most lenders perably should keep you in families if possible, and may enable you. During the foreclosure process before you actually lose your property owners, the federal government packages some options.
Loan Modification Programs
A loan mod is an alteration with all the self-proclaimed terms of a homeowners mortgage agreement. The changes permit the loan to be reinstated. The end result is a level of payments the homeowner can buy. For homeowners and market makers the U. S. government provides valuable information on the websites of these two agencies:
The U. S. Department of Homes and Urban Development
The actual U. S. Federal Deposit Insurance vendor
But be caul! Theft abound, and distressed householders are falling prey to offer fraudulent "loan modification" brand name. Remember these guidelines:
No loan mod company can guarantee overall performance.
Never make your mortgage payment to the loan adjust company.
Avoid companies designed to use official-sounding words like "Federal" or perhaps "U. S. Justice". Scam artists use these words regarding the consumer believe they are attached to the U. S. administration.
The "Making Home Affordable" Programs
A key section of the Obama Administrations Financial Stability Plan is "Making Home Affordable", a couple programs designed to change the U. S. housing market and instructions Americans facing foreclosure to lessen their monthly mortgage payments that is going to affordable levels.
One key element is the Home Not too expensive Refinance Program, which provides homeowners may well mortgages owned or called for by Fannie Mae or Freddie Mac a way to inance into monthly payments that may afford. Another program will be a Home Affordable Modification Robot, which aims to get rid of avoidable foreclosures and keep Americans comfortable.
Can I Apply into your Home Affordable Modification?
Qualifications as for the Home Affordable Modification Car insurance include:
You needed to be an owner-occupant in a standard one-to-four unit property.
Thats needed an outstanding principal balance that is equal to or less than $729, 750 for only one-unit properties; higher limits may connect with properties with more units.
Your loan must employ a originated on or prior to a January 1, 2009
Place payment (including insurance, expenditures, and fees) is compared to 31% of your low (pre-tax) monthly income.
You cannot afford your mortgage payment in consequence of significant change in financial resources or expenses.
Online information about the release Home Affordable programs is and includes instruction on finding HUD-approved housing counselor, determining inside the loan is held simply by Fannie Mae or Freddie Macosx, and how to speak to your mortgage company to find a dialogue. Additional resources include hints, how to understand your household statement, and a premium reduction estimator.
The choice of foreclosure is stressful and tough, but there are options which youll explore that may help you to keep your climate.
For more information regarding this and a lot more personal finance topics, please visit our web site u consumerfinancereport. com consumer finance report. We feature a large and growing article library covering a variety of consumer finance issues. The unique, proprietary content is created specifically to inform, educate, and afford guidance to consumers facing financial problems.