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If a creditor writes of a debt as a bad debt what happens next?
Wiki User
∙ 14y ago
Even if a creditor writes off a debt, you still owe the money, it only means that they do not think you will pay or they have waited the maximum allowed time under Generally Accepted Accounting Principles.
Depending on the type and size of this creditor they can take three typical options; (1) do nothing; (2) Issue you an IRS Form 1099 making you responsible to pay income tax on the amount they are writing off; (3) sell all their bad debts, typically quarterly, to specialized and aggressive charge-off debt collections agencies and law firms.
Wiki User
∙ 14y ago
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Is a bad debt erased after 7 years?
No it is NOT! You have to get your credit report to see when the creditor last updated their report to the credit reporting agency. If the creditor chooses to report this bad debt every month than your bad debt will only be erased from the last update. For example: You have a bad debt from a Sears credit card from Jan of 2010. Each month Sears has reported your bad debt to Trans Union or one of the other agencies. The new date is from the last time they updated your credit report NOT from Jan of 2010. They can update it every month for the next 20 years and it will stay as a bad debt and ruin your credit report score. Legal to do it too.
How do you find verification code on debt card?
Usually on back of card next to signature box. Three digits.
All long-term debt maturing within the next year must be classified as a current liability on the balance sheet?
Yes. Usually separated and called "Current Portion of Long-Term Debt"
Current maturity Of Long-Term Debt?
Current maturity of long-term debt is the amount which is liable to pay in current fiscal year Example: Long-term loan payable in 10 years = 10000 Current portion of loan payable in current year = 1000 Remaining portion payable in next 9 year = 9000 is the long-term debt payable
Should you pay a charge off that is listed on your credit report?
If you legitimately owe the debt, you should pay it, regardless of the statute of limitations or any adverse affect of it being on your credit report. A debt is a debt, and you have a moral obligation to repay it if it is legitimate and you are able to do so. Check and see what you statute of limitations are in your state--you might have 2 yrs or you might have 15 yrs, depending on the state and type of debt. If the statute of limitations has passed, you still owe the debt, but the creditor cannot take any course of action against you (credit reporting, litigation, garnishment, etc.). http://www.creditinfocenter.com/rebuild/statuteLimitations.shtml#2 If you are still withing the SOL, it would be best to pay off the charge off as it could be turned into a judgment, that then will allow for a garnishment of your wages or a lien on property. Lots of things can happen and not all will be pretty. Best to pay and avoid the bad. Good Luck. Only if the charge off would be removed within the next 2 years. If this is the case then it is best to wait and let it fall off on it's own. A charge off will remain on a credit report for 7 years regardless if it is paid or not, if paid it should reflect the action in the entry. The creditor can if they so choose file a lawsuit against the debtor in the circuit court in the county where the debtor resides. If the creditor wins the suit (they always do) a judgment will be entered against the debtor. The judgment can then be executed in accordance with the laws of the debtor's state of residence. The preferred methods for enforcing a judgment are wage garnishment or bank account levy. Other alternatives, liquidation of non exempt property (bonds, stocks, etc.) seizure and sale of non exempt property (vehicle, boat, motorcycle, jewelry, etc.) or lien against real property. Real property not protected by a homestead exemption can be subject to a forced sale.
If automatic stay is lifted what happens next in chapter 13?
Then the secured creditor would most likely foreclose on the property.
What happens if you die and your debt is greater than your estate?
Funeral expenses get paid first. Medical debt related to death usually next. The rest is divided up (usually) pro rata.
Is a bad debt erased after 7 years?
No it is NOT! You have to get your credit report to see when the creditor last updated their report to the credit reporting agency. If the creditor chooses to report this bad debt every month than your bad debt will only be erased from the last update. For example: You have a bad debt from a Sears credit card from Jan of 2010. Each month Sears has reported your bad debt to Trans Union or one of the other agencies. The new date is from the last time they updated your credit report NOT from Jan of 2010. They can update it every month for the next 20 years and it will stay as a bad debt and ruin your credit report score. Legal to do it too.
Who pays credit card debt if you die?
The debt will be paid from your estate. If there isn't enough, then the debt is discharged. The debt itself will not pass on to next of kin but a sizable debt might mean none of the deceased's estate does either.
When will the US reach 16 trillion debt?
Next month
What do you do if you have not received anything from your repo or creditor and it has been 93 days since the repo and no notification of anything?
Laws regarding the duty of a creditor after a repossession will vary by states. Some states require the creditor to give you notice of the sale in order to be able to recover a deficiency judgment, but there may be 50 different answers to your question depending on the state where you live. Send the lender a certified letter stating unless you here from them in WRITING in the next ten days you will assume your debt is cleared....also check your credit report and see if they have reported anything,if they have dispute it since you have no notification.Good Luck
What are the consequences for not paying off a debt that is in collection?
Depending on the amount that you owe..The collection agency can sue you on behalf of the original creditor and place a lien on your finances or property. If it is a smaller amount generally it will be placed on your credit report and affect your credit rating in a very negative way for the next 7 years which will affect any major purchases you intend on making with credit. Either way, your best bet is to pay the debt!
What happens when you grow sweet potatoes next to other plants?
What happens when you grow sweet potatoes next other plants? What happens when you grow sweet potatoes next other plants?
When Bradstreet writes Then straight I 'gin my heart to chide she signals that her next words will be addressed to whom?
When Anne Bradstreet writes "Then straight I 'gin my heart to chide," she signals that her next words will be addressed to herself. This phrase suggests that she is about to criticize or scold her own heart for its thoughts or emotions.
Can a debt agency pursue a debt from a non next of kin?
if you used them as a point of contact, that person can tell the collector not to contact them again and they must do so per the fair debt collection act.
How do you calculate DBR?
The way to calculate DBR (Debt Burden Ratio) is to take all of a persons debt burden and add it together. Next, divide that debt burden by the after-tax income. This is the DBR.
What is the leading debt relief company?
The leading debt relief company would be National Debt Relief (855-807-1484). This is according only to 2013 debt relief reviews. The next top company would be CuraDebt then followed closely by CareOne Debt Relief Services.
