Paid charge offs

iVillage Member
Registered: 03-27-2003
Paid charge offs
4
Sat, 06-21-2003 - 10:27am
I posted this on the debt q & a forum, but I don't always have good luck getting feedback there, so I wanted to post it here too. Thanks for any feedback!

Okay, I've started paying on dh's charge off. We have a tax refund coming that we plan to apply in part to the charge off, in part to our contingency fund, and then other things--some to charity, a little for spending money, some for our down payment fund, and so on (some of you have seen my complicated percentages chart for "found" money lol). My question is, I know a charge off looks a lot less awful on your record once it has become a "paid charge off," but I want to know whether the credit report will record *when* it was paid off and whether it matters how soon. When we go to apply for a mortgage in a few years, I plan to tell them (which is the truth) that dh accrued the charge off through poor record keeping, but that I am fully in charge of the finances now and that I keep good records and pay my obligations (which is reflected on my nearly perfect credit record). I would also like to show them that as soon as I learned of the charge off, I took care of it. Will it matter if I can show them that I paid it completely off almost immediately, or will they just want to know that I paid it faithfully until it was paid off?

If it makes a big difference, then we will apply nearly all the refund and pay it off all at once. Otherwise, I'd rather pay only a portion of the refund to it and the rest to other allotments (in either event, I *will* put 10% to charity, but the other items are negotiable).

Thanks for any feedback.

Heather

Avatar for zaboz
iVillage Member
Registered: 03-26-2003
Sat, 06-21-2003 - 11:44am
I don't think it matters when you pay it off. When we applied for our mortgage,

I had a very small charge-off ($40) that I wasn't aware of. Our mortgage lady told

me I should take care of it. Honestly I never did and it didn't make a difference.

I had others too that were several years old. Having them paid looks better than

not but it doesn't make a huge difference. More than anything they just want to

see that you will follow through, even if it's after the fact.

I totally respect your determination to put money toward charity. But don't

forget that sometimes you have to take care of yourself and your family

before you are empowered enough to give help to others.

It's like the oxygen mask that comes down in the plane. Your instinct is

to help the child next to you but you're no good to anyone if you can't breathe first.

But of course it's a very personal decision and I respect you for your committment.

Charity's now a part of our regular budget but first we got current on all

our bills and paid off our old committments. I figured these were people that

we had promised to pay and we needed to honor that before we gave

money to someone else. It's a huge relief to finally be in a place where we can give

small donations and know that everything else is taken care of too.

iVillage Member
Registered: 06-14-2003
Sat, 06-21-2003 - 1:05pm
Heather, you may even be able to have the creditor remove the charge-off from the credit report. I have known people that negotiate paying the amount owed (or sometimes even less) in exchange for the creditor taking it off your report. It doesn't hurt to ask, and you have something that they want - money. If you do come to an agreement, get something in writing.

Good Luck!

Miki

iVillage Member
Registered: 03-27-2003
Sat, 06-21-2003 - 2:45pm
Thanks for your feedback and experience. I understand what you are saying about charity, but we *are* current on everything and paying quite a bit extra to credit every month. This charge-off is something that dh did behind my back and I was only made aware of it by checking his credit report recently. I plan to pay it off, and to pay more than the monthly amount I agreed on with the company's reps, but I have also made a commitment to give back some of the bounty that we receive, and that means I stick with my 10% to charity.

If we are ever in a position where we are having to accept charity ourselves, obviously I won't stick with the plan out of pride. But even the widow with only half a penny gave, and was honored above the rich men for that. Not that it's about honor, either--just that it's a commitment that we made and I plan to stick to it despite setbacks caused by another family member's irresponsible actions.

Anyway, thanks again for your experience. It's very helpful to hear how things like this have affected others.

Blessings,

Heather

iVillage Member
Registered: 03-27-2003
Sat, 06-21-2003 - 2:47pm
Thank you--I actually already tried that. They were very firm.

Thanks, though, for the thought!

Heather