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Bankruptcy or charge off ???
- Thread starter riddler
- Start date
I am an expert here. The rule is 7 years from charge off. However many collection agencies break this rule and report it as a new debt. If it goes through many agencies they each may have illegally put this on your credit. How long it stays on your credit has nothing to do with the statute of limitations for them to bring suit against you. Here is a link that shows there. http://www.cardreport.com/laws/statute-of-limitations.html
The debt has likely been sold and has nothing to do with the original creditor. If you settle there is a high likelihood that they will sell the balance to another agency who still try and collect the rest. Even if they donât they will likely give you a 1099 for the forgiven debt.
Each time a debt is sold, it goes for less money. The current agency may have paid 5 cents on the dollar, settle with you for 50 cents on the dollar (a 1000% profit) and then write off the other 50% basically ripping off the taxpayer with a phony 1099. Many collection agencies will argue they are not bound by the 7 years as they have purchased the debt. They are wrong.
You do have to worry about being sued. What can even be worse is arbitration. Most new credit cards have arbitration clauses in them and the consumers lose 99.9% of arbitrations. Per the terms of the arbitration agreement, an arbitration ruling against you can be immediately turned into a judgment by the creditor supplying the paperwork to a court. Once this is a judgment it is there until you die or file bankruptcy.
I suggest you go to the site http://budhibbs.com/
The debt has likely been sold and has nothing to do with the original creditor. If you settle there is a high likelihood that they will sell the balance to another agency who still try and collect the rest. Even if they donât they will likely give you a 1099 for the forgiven debt.
Each time a debt is sold, it goes for less money. The current agency may have paid 5 cents on the dollar, settle with you for 50 cents on the dollar (a 1000% profit) and then write off the other 50% basically ripping off the taxpayer with a phony 1099. Many collection agencies will argue they are not bound by the 7 years as they have purchased the debt. They are wrong.
You do have to worry about being sued. What can even be worse is arbitration. Most new credit cards have arbitration clauses in them and the consumers lose 99.9% of arbitrations. Per the terms of the arbitration agreement, an arbitration ruling against you can be immediately turned into a judgment by the creditor supplying the paperwork to a court. Once this is a judgment it is there until you die or file bankruptcy.
I suggest you go to the site http://budhibbs.com/
This is mostly wrong. Contract law is contract law. It doesn't reset and judgements get removed after 7 years from filing. Thesexperts need some law school
Bingo! A lot of people get into trouble with this. BK attorneys don't tell you this because you may not file for BK otherwise. Be careful here.
Just my 2c. BK is the absolute last thing you should do. Try to work out a plan with Citi to get them off your back. Shit happens, start over.
Just my 2c. BK is the absolute last thing you should do. Try to work out a plan with Citi to get them off your back. Shit happens, start over.
Quote from TheBestGuruEver:
check IRS rules for this one. If it's over a very low amount I think then you owe taxes on monies above that low amount -- as if you actually earned it.
so you pay 3k then say another 500 in taxes due to the IRS.
not sure, but I think this is something you want to look into.
Quote from Zentrickster:
This is mostly wrong. Contract law is contract law. It doesn't reset and judgements get removed after 7 years from filing. Thesexperts need some law school
Ah no, learn to read.
7 years is how long it is on your credit file from charge off, see the FCRA. A chapter 13 stays on your credit 7 years and a chapter 7 for 10 years.
You can be sued up to the SOL which I provided. I also wrote "Once this is a judgment it is there until you die or file bankruptcy."
Quote from Mr Pain:
Ah no, learn to read.
7 years is how long it is on your credit file from charge off, see the FCRA. A chapter 13 stays on your credit 7 years and a chapter 7 for 10 years.
You can be sued up to the SOL which I provided. I also wrote "Once this is a judgment it is there until you die or file bankruptcy."
Once a judgment is awarded, it is only guaranteed to be there for N years, depending on the state (7 or 10 are normal here) then it dies unless the owner of the judgment pays money and refiles to renew it. It is also completely up to the holder of the judgment to pursue collection on it. This effort is greatly hindered unless your state allows wage garnishment (many do not).
Their likelihood of renewing the judgment depends on your perceived financial state and/or responses or lack thereof to collection efforts thus far.
Note there are also many law firms that operate as debt collectors that claim they have a judgment on you or will pursue one imminently, but never actually officially filed it and have no intention of ever doing so.
the fact that they want to settle for .50 on the dollars leads me to believe they will eventually charge this off? if they were going to take me to court and freeze bank accounts,would'nt they have done so already?
also,would now be the best time to be in a situation like this due to so many people being late and defaulting because of the economy? in other words,i can slip through the cracks with just a charge off?
also,would now be the best time to be in a situation like this due to so many people being late and defaulting because of the economy? in other words,i can slip through the cracks with just a charge off?
If you get them to settle for a reduced amount you need to get it in writing that clearly states that the debt is settled in full for (x) amount of dollars. Also save the cancelled check.
You will need to retain this information for the rest of your life because they may attempt to come back and say it wasn't settled.
You will need to retain this information for the rest of your life because they may attempt to come back and say it wasn't settled.
Quote from fframe38:
Once a judgment is awarded, it is only guaranteed to be there for N years, depending on the state (7 or 10 are normal here) then it dies unless the owner of the judgment pays money and refiles to renew it. It is also completely up to the holder of the judgment to pursue collection on it. This effort is greatly hindered unless your state allows wage garnishment (many do not).
Their likelihood of renewing the judgment depends on your perceived financial state and/or responses or lack thereof to collection efforts thus far.
Note there are also many law firms , but never actually officially filed it and have no intention of ever doing so.
Exactly. Nicely stated. One needs to be very cautious of the misinformation on this site particullarly that which is prefaced "I am an expert"