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If I have a charged off account with capital one and they sold it to another company and now the other company is harrassing me. I don't have the money to pay it right now. What can I do? And do I have to pay it if it is charged off?
Even if it's charged off, you still owe it to somebody, either the OC (Crap1) or the purchaser (Junk Debt Buyer--JDB). The company contacting you may be an assignee collection agency (CA)--sometimes they're not real clear on whether it's purchased or assigned. If it's assigned and they're not successful in collecting, Crap1 may take it back and try to sue you (through a local attorney) or they may assign it to a different CA or they may sell it to a JDB.
Crap1 is one of the most litigious credit card companies. They take a lot of people to court--you may soon be one. If you look up the website for your local court system and it allows you to search by party, you'll probably see that they sue a lot more than Discover or MBNA, two other big litigants ... everyone else trails the pack.
Charged-off means they mark it as bad debt for accounting purposes and to show the regulators how much of their debt is bad and how much is good ... it has nothing to do with whether you still owe.
Even if you're not sued, you'll be hearing from JDBs 20 years from now on this debt, and the JDBs will do whatever they can within the FCRA and FDCPA to try to collect it, even after it's beyond the Statute of Limitations (and your state probably doesn't regulate JDBs very well, so don't expect state law to be too much help). And they'll cheat, so keep good records ... if you're not going to pay this, keep the records forever, because you'll need them to fend off placement of tradelines on your credit reports that look brand new, even though they're for years-old debt.
At some point years from now, you may get an exciting credit card offer in the mail (not having seen one in forever because of the bad credit). If you don't read the fine print, you'll fail to notice that it revives your old debt and puts the balance on your new account.
Once it's past SOL, your options get a lot better (if you have good records), but your opponents may never give up!
When a company 'charges-off' a loan 'write-off' the asset. It's simply an accounting entry that reduces their profits and taxes.
An overdue debt can be shown on your credit 7 years from the date it was charged off. 10 years for bankruptcy, and different guidelines for judgments and liens.
Per Fair Credit Reporting Act. You figure the report limit this way: Last Payment made on the debt + 180 days + 7 years. (This rule does NOT apply to certain obligations such as: Student loans, child support, taxes etc.
All that fine print that no one reads becomes important now. Generally it gives the lender quite a bit of latitude to charge interest and penalties.
The SoL says that after a certain period of time that the debtor is no longer legally required to pay a debt, but you can restart the clock on the Sol. By making a payment, signing an agreement to pay or even admitting that the debt is valid could be enough to stop or reset the Sol clock to zero. You need to do a little research to learn the Sol in your state.
Now even though the Sol says that a debt doesn't have to be repaid it's not illegal to attempt to collect it for the creditor. As for collection agency's they are governed by the "FDCPA" Fair Debt Collection Practices Act.
Collection agencies work for a percentage of any money that they're able to collect. Others buy a group of bad loans for pennies on the dollar. Then they keep everything collected. Since they own the loan, they're also allowed to re-sell it to another collection agency.
Whoever owns the loan, original lender or collection agency, is allowed to keep charging interest and penalties per the original loan agreement and applicable laws.
If you agree to settle the debt by paying a portion of it, you need to get a release from the agency saying that the balance of the debt is forgiven. You should look for the words "payment in full".
Once a debt as been reported as written-off, paying it will not wipe away the bad comment in on your credit report.
It will look better, but only slightly. It's possible that the original lender may agree to remove the item if a partial payment is made. But, only the original lender or owner of the debt may do that. Not an outside collection agency.
You could if you so desire send a letter by certified mail, return receipt requested. Include a statement in your letter that this is their official notice to cease and desist contact with you in any form. (Certain contacts are allowable even after sending a cease and desist letter) Also ask them to validate this debt.... You want them to account for every penny (including dates) they claim is due and every payment made on the account or debt. This will not affect the reporting limit. Only a payment can affect the reporting limit.
You should know your rights and the respective responsibilities (collector, credit reporting agency) of the agencies you are dealing with. Here are links to the Fair Debt Collection Practices Act and the Fair Credit Reporting Act.
The Federal Trade Commission enforces these laws. Violators of these laws are also subject to civil suit and punitive damages if you can show that the acts were deliberate. (Not the result of a bonified error)
http://www.ftc.gov/os/statutes/fdcpa/fdcpact.htm
http://www.ftc.gov/os/statutes/fcra.htm