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stacie1980 · Jan 6, 2008, 09:25 PM

I still have my 2006 car that I purchased back in May 2006. My last payment was November 2006. I have had major health problems and unable to work. The car was my only transportation. I still have my car and have not made a payment. They have not called or anything in past year. It is on my credit as a charge off/bad debt. What does this mean? Have they given up on me? The last time they inquired on my credit report was jan 2007. I still have the car and not sure what to do? My bank that I am financed through is across the country. How long will I be able to drive this car without worrying about it being repo'd and if I started to just start making payments to slowly pay of this debt how will that affect my credit?

George_1950 · Jan 7, 2008, 08:20 AM

The car could be repo'd at any time, it's just a matter of when they find you and the car. In the meantime, keep the car fully insured. If you plan to keep the car, you will need to catch up your payments. When the car is repo'd, it will be sold at auction and you will be responsible for the unpaid balance. There are technicalities in all of that, but most banks know how to play the game.

ScottGem · Jan 7, 2008, 08:33 AM

A charge off means the lender took a tax loss on the loan. It has no effect on your obligation to pay.

At some point, it is likely the lender will sell the debt to a collector. That collector may come after you more aggressively. The good news is the collector would probably have to get a judgement against you before they can repo it. When you get a summons, you can then offer a settlement. I would start putting money aside to use towards the settlement.

excon · Jan 7, 2008, 08:43 AM

Hello stacie:

I have more questions than answers. You only had 6 months worth of payments to make. Why? How many of them DID you make? Did you put a large amount down?

I have a feeling that the car is NOT going to be repossessed. The bank already charged it off. IF they were going to DO something, they would have done it long before now, and long before they closed the account and charged off the loan. Certainly, they know where you live.

I think they did this, because your payment structure indicates that you put down a large amount of money, so they may feel as though they've gotten as much out of you as they're going to get. I really don't know why they would do what they appear to be doing, however - who cares?

I would keep it insured. I wouldn't start to make payments. To whom are you going to make them? The bank already closed the account.

The bad news is, you'll never be able to sell the car. You don't have the title, and I don't think you'll ever get it.

I also think you'll be hearing from a collection agency down the road. They're not going to want the car back either. This debt did NOT go away.

Maybe the collection agency is going to have the title…… Nahhh, the bank does, and they ain't going to part with it.

I actually have seen a case like this before.

excon

excon · Jan 7, 2008, 08:57 AM

Originally Posted by ScottGem

I think she meant the last payment she made was 11/07, not the last pmt due.

Hello again, Scott:

I think you're right. Well, that changes everything (gotta stop smoking that stuff).

excon

stacie1980 · Jan 7, 2008, 10:43 AM

Originally Posted by excon

Hello stacie:

I have more questions than answers. You only had 6 months worth of payments to make. Why? How many of them DID you make? Did you put a large amount down?

I have a feeling that the car is NOT going to be repossessed. The bank already charged it off. IF they were going to DO something, they would have done it long before now, and long before they closed the account and charged off the loan. Certainly, they know where you live.

I think they did this, because your payment structure indicates that you put down a large amount of money, so they may feel as though they've gotten as much out of you as they're going to get. I really don't know why they would do what they appear to be doing, however - who cares?

I would keep it insured. I wouldn't start to make payments. To whom are you going to make them? The bank already closed the account.

The bad news is, you'll never be able to sell the car. You don't have the title, and I don't think you'll ever get it.

I also think you’ll be hearing from a collection agency down the road. They’re not going to want the car back either. This debt did NOT go away.

Maybe the collection agency is going to have the title…… Nahhh, the bank does, and they ain’t gonna part with it.

I actually have seen a case like this before.

excon

Yeah I only made 6 payments last payment made NOV of 2006 not 2007. I put $2000 downpayment and it was charged off at 13,000 that's half what my loan amount was. So I am totally confused it has been charged off since march of 2007. They have family numbers references and a co-applicant who they have only contacted once since 2006. They have never contacted him since it was charged off and he has had same job and address. I know it messed my credit up but I am trying to figure out what they did.

George_1950 · Jan 7, 2008, 11:03 AM

And folks are wondering why the banking system is failing?

ScottGem · Jan 7, 2008, 11:31 AM

They only charge off the principal.

brown_eyes_3546 · Jan 10, 2008, 01:00 AM

STACIE: I'm an accounting student and according to business laws and acounting principals they will not repo the car because once they write it off it goes into a bad debt account. As long as you do not offer any money nor make a payment to a collection agency if they call then you have nothing to worry about. If you pay a penny it will reopen the debt and it will zing your credit again. You as of now have no more obligation to pay. And lets face it. If you have a bad debt written off then your credit is already screwed. All companies that give loans have accounts called bad debt allowance and it is extra money that is put aside in case someone defaults like you have. Then when they move your account from recievables to bad debt it is a tax write off and you no longer have to worry about it. Credit card companiees do it all the time.

STARSFAN: Im not real familiar with bancruptcy laws because they have changed a lot recently but I will say that the reason that they haven't and won't come to get it is because they can't legal touch it. You filed bankruptcy therefore you were relieved of the debt there fore the car is technically in your name and the bank is legally required to hand the title over since per the federal government you owe them no more money! Call the bank and get your title to your car. Don't pay them a penny though because yet again if you reopen the debt you are responsible for the entire loan all over again. They are not legally allowed to even ask you for a penny of what is left of the loan.

{Starfans post moved here: https://www.askmehelpdesk.com/credit...ns-170856.html}

brown_eyes_3546 · Jan 10, 2008, 07:29 AM

They are not sold to collection. A collection agency comes and asks if they can attepmt to collect it. They offer the original company a certain percentage of what they collect in return for allowing them to collect. If you give them anything then you still owe everything that you had left on the loan or w/e it doesn't give you full credit for what you gave the collection agency because they didn't give it to you. Legally if an account is written off the person has no more obligation to pay. It is part of business law unless you live in Louisiana which is a weird state. When a collection agency calls you you have no obligation to give them anything and in fact it is not in your best interests to give them a dime if your credit report says it is bad debt. That is why businesses have those accounts!

ScottGem · Jan 10, 2008, 07:45 AM

Wrong again. Try checking some of the threads here and you will see questions about debts that have been sold several times to collection agencies. Yes, creditors will sometimes employ collection agencies to collect a debt they still own, but they will also sell off the debts.

Please show me anywhere in any business law that states that when a debt is charged off the debtor's obligation to pay ends. That is just not true. The purpose of a charge off is so the creditor can take a tax loss on the bad debt. It has absolutely NO effect on the debtor's obligation to pay. That's why creditor's sell off these debts for a fraction of their face value. Since they've already taken a loss on them anything that's collected is gravy. I don't know where you are getting your info, but its dead wrong.

excon · Jan 10, 2008, 07:56 AM

Originally Posted by brown_eyes_3546

im an accounting student and according to business laws and acounting principals they will not repo the car because once they write it off it goes into a bad debt account....

Hello brown eyes:

Being this is the law board, instead of just saying what you think the law is, please cite where I might go read this myself.

In fact, you can't. There is NO SUCH LAW. You are wrong.

Debt is bought and sold in this country all the time. If a company buys a debt, no matter how it pays for it, it certainly is deserving of being paid - just like any holder of any note is deserving of being paid.

Are you saying that a purchase on consignment isn't a purchase? I think you are. I think you're mistaken.

Do you own a credit card? Please cite from your contract where it says that you don't have to pay even if the debt is "charged off" - or for ANY reason. You cannot, because there is no such passage in ANY credit card contract. As a matter of fact, I think you'll find verbiage to the effect that the contract is valid to any assignee (that would be a 3rd party collector). Do you think credit card lawyers didn't think of that?

Is a debt like that worth nothing? How can that be? Some people pay on their old debts. That means the debt DOES have value. Don't you think credit card companies know that?

Do you think the bottom feeding collection agencies just HOPE to collect, without any leverage at all?? It is true, that the very bottom of the bottom feeders will buy a debt that is beyond the statute of limitations, so they can't sue. This debt is bought for pennies on the dollar. But it's a legal debt and is still owed. Consequently, they can attempt to collect it FOREVER.

Stay in school. It's a good place to learn about stuff like this.

excon

Fr_Chuck · Jan 10, 2008, 08:17 AM

Well first I would almost want to delete the posts by brown eyes, since they are so wrong, and so bad, that this could cause someone to do something and get thierself into more trouble.

1. yes there are collection firms that buys debts, loan papers are bought and sold all the time. Some are sold three or four times.

2. being written off is merely an accounting term that applys to writing off the profit off their taxes and has no bearing on their right to sue.

3. And at bankruptcy you will either re-affirm the dept, or you will turn the car over to them ( without them having to come get it) you don't just get to keep it.

4. Since there is a lien, the driver will not have the title, the loan company or collection agency will be holding it.

They can repo it at any time they want, the fact they are across the county is most likely the only reason they have not.

Guest · Apr 3, 2008, 11:55 AM

I know someone who has been driving around in a car for almost 10 years that was written off by a finance company. No judgement was ever brought against him. So, part of what Brown eyes is saying might be true.

ScottGem · Apr 3, 2008, 12:21 PM

Originally Posted by Guest

I know someone who has been driving around in a car for almost 10 years that was written off by a finance company. No judgement was ever brought against him. So, part of what Brown eyes is saying might be true.

Just because the finance company chooses not to repo the car and there could be a variety of reasons for that, doesn't mean the obligation to pay ended.

In the future please check the dates before you answer. This thread is three months old.