“Dear Steve,
I also was a victim of CMS and Brad Daley. I was sued and got a judgment against me from B/A.
My question is, If a credit card company writes the debt off, can an attorney still sue you? Looks like if the debt was written off the IRS would write off the total for the cc company and they’re would be no debt owed.
Now I have another attorney in another state sending me letters that I did answer that I disputed.
Thank you
Jay”
Dear Jay,
I know, it’s totally crazy but a debt must be charged off in accordance with the rules put forward by the Office of the Comptroller of the Currency. A charged off debt is reported to the IRS and you owe taxes on the forgiven debt. But the debt is actually not forgiven nor not collectible.
A charge off is an accounting function and does not mean the debt is still not legally collectible. The original creditor or a new creditor that buys the debt may sue you to enforce the debt contract and to collect the debt.
Please update me on your progress by
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Steve,
I actually think if everyone did a little more studying of the monetary system and how it works, they would come to the understanding that the banks never gave you a loan nor do they say in any of their paperwork that you sign that they loaned you any money!! The banks will never lie, they tell you in your mortgage papers that you own the property and that you have “the right” to mortgage, grant or convey, not that you HAVE to!! They give you your deed BEFORE the alleged loan is paid off…would a private investor do that?? They never engage in signing your mortgage or your promissory note thereby making it a unilatteral adhesion agreement under contract law. How can they provide a Satisfaction of Mortgage when they never signed the mortgage??  Now when you have a “charge off” debt you can challenge them by requiring them to validate the debt. Understanding how it all works gives you the power that they don’t want you to have to fight them legally!! Interesting how once you know the rules of Monopoly, it is actually a fun game to play!!
Barbara
Monopoly is a game played with fake houses and fake money. Real people have lost real houses by attempting to “eliminate” their mortgages using these same bogus arguments.
Charles,
The only thing bogus is the banks documents! You need to get educated, it isn’t a scam. I got my house free and clear, the bank couldn’t sign off fast enough! They know when you know and then they know when to cut their losses! It ain’t like they didn’t make a TON of money, MILLIIONS, off of monotizing your note!!
Barbara, I do not need to “get educated” on a subject that I have followed professionally for many years. Believe whatever you like. The fact remains that there are people sitting in jail for promoting “mortgage elimination” schemes that relied on the exact same arguments you are referencing. (Cf. “The Dorean Group” for starters.)
How do you claim the bank invalidated your mortgage? By what process.
Barbara, 1) you are clueless and B) what you are describing is the Hess Kennedy scam that was shut down a few years ago and it hasn’t worked for all of the copy cat crooked attorneys who jumped on the bandwagon either.  That scam may work on occasion with some 3rd party collectors but fails miserably when the original creditor files a lawsuit.Â
The process you are talking about is highly unethical, extremely risky for consumers but very lucrative for the shark attorney charging upfront fees for this service.  Shame on you for even thinking those thoughts out loud.  Go directly to Jail, do not pass Go, do not collect $200 for passing Go….while you’re at it “Go” get a real job !!
Â
AA,
You are the clueless one!! Do you not read the papers, watch the news and study things online??? Maybe you might want to start by reading your mortgage docs, specifically Borrower’s Covenants! You could learn alot of you read!! And if it is such a scam, how is it that over 100,000 people in Florida alone in the past 2 years have been successful in gaining Quiet Title to their property by forcing the bank to verify that a true money loan took place, and they can’t! I suggest you reseach the following to get started on your learning path: Bankruptcy of United States 1933; Federal Reserve System; HJR 192/Public Law 7310; Strawman account/Pre paid treasury account; red or black #’s on backside of social security card; and finally, go to YouTube and watch the 1hr and 47 min play on the Creature from Jeykell Island!! Get Educated!! What is so unethical about asking some to validate a claim if I suspect I have been defrauded??? NOTHING!! The unethical one is the party claiming I owe them something they cannot prove!! When I asked my bank to verify, they couldn’t, wouldn’t and didn’t. I have a Forensic Audit that shows the fraud violations of which there were 38 and a securitization audit which shows the break in the chain of custody and how they monotized my note with my social security number! But I guess you wouldn’t understand all of that as you don’t study and you don’t get the monetary system and how it works at all; but the banks got it and couldn’t sign my release fast enough!!
Steve,
This is interesting, but my understanding is when a bank charges off a debt, they actually get the tax credit so therefore they cannot come after you to collect on the debt once that has happened. True???
Barbara
False.
What tax credit? This is a myth, told over and over again. A charge-off represents a loss to the bank, period. They make less profit, so to that extent, they have a lower tax liability. There is no “tax credit” associated with such losses.
But if you paid income tax on your 1099c, and the debt was still collected /paid u would have paid the debt owed plus income tax, that doesn’t seem to make sense?
Justin,
LMAO, harken my tweets.
Actually….a debt is not forgiven when the statute of limitations expires. The only things that happens as of that date is a creditors can’t sue you for the debt, but they can pursue you till the end of time. Most people are unaware of that.
Steve
Great Stuff Steve, re: the 2nd mortgage question. I find it interesting that if the lender of the 2nd mortgage see’s forcing a foreclosure on the property as a secure plan of recourse they do so within 90 days and don’t classify the debt as bad or charged off. So you’re sitting on a lame duck house & your 2nd mortgage is in like Vegas or Orlando (super inflated) and there’s no equity in it, you’ll know for sure within 90-120 days if you don’t see any legal work at your door & finally for sure after the 180 day inspection. Would the statute of limitations for Home Equity loans be the same as credit cards per state?
I just wish the bulletin would have shed some light on if there is a classification for actual forgiven debt. I know back before the collection agencies ruled the world debt was actually forgiven and you’d have to report it as income, but collection agencies wouldn’t try and collect the way the do now.
I guess my question is obsolete as well then.
I’m lead to believe the only “forgiveness” is when the statute of limitations expire. Even then Collectors can call you, that’s the only reason to pay it or partially pay it, (notice I didn’t say settle) since by definition settle means settling outside of court.
Thanks Steve, I harken your tweets, replies and updates.
Justin
Justin,
Here are some excerpts from OCC Bulletin 2000-20 which covers this subject.
“The 1980 policy established uniform guidelines for the classification of retail Date: June 20, 2000 installment credit based on delinquency status and provided charge-off time frames for open-end and closed-end credit.”
In general, the Uniform Policy:
Ö¾ Established a charge-off policy for open-end credit at 180 days delinquency and closed-end credit at 120 days delinquency.
Ö¾ Provided guidance for loans affected by bankruptcy, fraud, and death.
Ö¾ Established guidelines for re-aging, extending, deferring, or rewriting past due accounts.
Ö¾ Provided for classification of certain delinquent residential mortgage and home equity loans.
Ö¾ Provided an alternative method of recognizing partial payments.
Actual credit losses on individual retail credits should be recorded when the institution becomes aware of the loss, but in no case should the charge-off exceed the time frames stated in this policy.
Closed-end retail loans that become past due 120 cumulative days and open-end retail loans that become past due 180 cumulative days from the contractual due date should be classified Loss and charged off.
Institutions should use one of two methods to recognize partial payments. A payment equivalent to 90 percent or more of the contractual payment may be considered a full payment in computing past due status. Alternatively, the institution may aggregate payments and give credit for any partial payment received. For example, if a regular installment payment is $300 and the borrower makes payments of only $150 per month for a six-month period, the loan would be $900 ($150 shortage times six payments), or three full months past due.
—
The OCC does not do anything with the debt but require the bank to properly classify its loan performance. This all harkens (a word I need to use more) back to the S&L crash of the 1980s. After that regulators wanted to see better reporting of assets on the books.
A charge off is simply a debt which can not be shown on the books as good asset. A debt can be charged off and help if the bank wants to but most just package them and sell them in bulk just to move the “crap” stuff on their books.
Steve
Steve,
Brilliant explanation.
However I’ve been unsuccessfully looking on the OCC’s website for clarification of that rule.
Can you throw me a link?
What is the debt called after the OCC officially forgives it? “Forgiven,” “Discharged,” Charged off for Real”???
As if this ever happens anymore for credit cards.
Second mortgages post foreclosure & eviction seem more likely that the OCC might eventually decide classification, because the likely-hood of collecting isn’t high & no collection entity wants to spend on suit nor does the debtor want to do discharge debt through BK.
On credit reports it says “Charged off” after 180 days generally.
What would the status say after the Office of the Comptroller of the Currency officially classifies the debt as non-collect-able?
How does one petition or begin that process? Any light you can shed?
Regards,
Justin
Steve,
Brilliant explanation.
However I’ve been unsuccessfully looking on the OCC’s website for clarification of that rule.
Can you throw me a link?
What is the debt called after the OCC officially forgives it? “Forgiven,” “Discharged,” Charged off for Real”???
As if this ever happens anymore for credit cards.
Second mortgages post foreclosure & eviction seem more likely that the OCC might eventually decide classification, because the likely-hood of collecting isn’t high & no collection entity wants to spend on suit nor does the debtor want to do discharge debt through BK.
On credit reports it says “Charged off” after 180 days generally.
What would the status say after the Office of the Comptroller of the Currency officially classifies the debt as non-collect-able?
How does one petition or begin that process? Any light you can shed?
Regards,
Justin
Justin,
Here are some excerpts from OCC Bulletin 2000-20 which covers this subject.
“The 1980 policy established uniform guidelines for the classification of retail Date: June 20, 2000 installment credit based on delinquency status and provided charge-off time frames for open-end and closed-end credit.”
In general, the Uniform Policy:
Ö¾ Established a charge-off policy for open-end credit at 180 days delinquency and closed-end credit at 120 days delinquency.
Ö¾ Provided guidance for loans affected by bankruptcy, fraud, and death.
Ö¾ Established guidelines for re-aging, extending, deferring, or rewriting past due accounts.
Ö¾ Provided for classification of certain delinquent residential mortgage and home equity loans.
Ö¾ Provided an alternative method of recognizing partial payments.
Actual credit losses on individual retail credits should be recorded when the institution becomes aware of the loss, but in no case should the charge-off exceed the time frames stated in this policy.
Closed-end retail loans that become past due 120 cumulative days and open-end retail loans that become past due 180 cumulative days from the contractual due date should be classified Loss and charged off.
Institutions should use one of two methods to recognize partial payments. A payment equivalent to 90 percent or more of the contractual payment may be considered a full payment in computing past due status. Alternatively, the institution may aggregate payments and give credit for any partial payment received. For example, if a regular installment payment is $300 and the borrower makes payments of only $150 per month for a six-month period, the loan would be $900 ($150 shortage times six payments), or three full months past due.
—
The OCC does not do anything with the debt but require the bank to properly classify its loan performance. This all harkens (a word I need to use more) back to the S&L crash of the 1980s. After that regulators wanted to see better reporting of assets on the books.
A charge off is simply a debt which can not be shown on the books as good asset. A debt can be charged off and help if the bank wants to but most just package them and sell them in bulk just to move the “crap” stuff on their books.
Steve
Great Stuff Steve, re: the 2nd mortgage question. I find it interesting that if the lender of the 2nd mortgage see’s forcing a foreclosure on the property as a secure plan of recourse they do so within 90 days and don’t classify the debt as bad or charged off. So you’re sitting on a lame duck house & your 2nd mortgage is in like Vegas or Orlando (super inflated) and there’s no equity in it, you’ll know for sure within 90-120 days if you don’t see any legal work at your door & finally for sure after the 180 day inspection. Would the statute of limitations for Home Equity loans be the same as credit cards per state?
I just wish the bulletin would have shed some light on if there is a classification for actual forgiven debt. I know back before the collection agencies ruled the world debt was actually forgiven and you’d have to report it as income, but collection agencies wouldn’t try and collect the way the do now.
I guess my question is obsolete as well then.
I’m lead to believe the only “forgiveness” is when the statute of limitations expire. Even then Collectors can call you, that’s the only reason to pay it or partially pay it, (notice I didn’t say settle) since by definition settle means settling outside of court.
Thanks Steve, I harken your tweets, replies and updates.
Justin
Justin,
LMAO, harken my tweets.
Actually….a debt is not forgiven when the statute of limitations expires. The only things that happens as of that date is a creditors can’t sue you for the debt, but they can pursue you till the end of time. Most people are unaware of that.
Steve