Ask The Get Out of Debt Experts Credit Counseling

We Were With MMI and Chase Bank Charged Off Our Account Anyway. – Eveline

“Dear Steve,

Chase Bank credit card customer, jointly with husband. Two open accounts. Both of us, unfortunately, diagnosed with cancer within a year, financial hardship, inevitable. Called Chase when we got behind and they said they only would go through MMI (Money Management International) to set up a repayment plan. We contacted MMI and everything got set up, confirmation letter from Chase. All good, made three consecutive payments on the accounts as agreed and all of a sudden got a call from MMI that the accounts were “charged off”.

We were stunned that they would do this when they were getting 6% interest and we were on our way to paying off the debts, eventually, we thought. We got 1099s from Chase for the charge offs for that tax year. We paid income tax on them but the accounts still show a bal. on our credit reports and it says they were charged off. Sent in disputes several times, no changes. Don’t want to open up a can of worms, but now that the MMI case has come up and the document shredding and incorrect balance situation with Chase we are rethinking this.

Do you think we can get this taken off our credit report, under the circumstances or corrected somehow if we send a copy of the whistleblower documents to the credit reporting agencies? With 1099s sent to us and having to report that as income, can they still go after the debt and why is there still a balance showing anyway? We wanted to do the right thing, but apparently this must have been a better tax write-off for them, it wreaked havoc on our credit report.

Eveline”

Dear Eveline,

I’m so sorry about the battle with cancer. At least things are better with that, I hope.

Sadly the news about the debt situation isn’t so good. A charge off is merely an accounting function. Once the debt was charged off, if you could not pay it, your counselor should have told you to look at bankruptcy. Bankruptcy would have discharged the debt without a tax liability.

READ  Holy Crap. Chase Minimum Credit Card Payment Goes to 5% of Balance for Mary.

It sounds totally crazy but a charged off debt results in a 1099 and tax liability if you are solvent. If you were not solvent there is a form to complete to shed that liability in that tax year. A charged off debt is still 100% collectible and is typically sold to a debt buyer who will then pursue you over the debt. They also have the right to sue you to collect it.

There appears to be nothing intentional in this matter. It looks as if when the account was submitted by MMI that either you were behind on the debt or that Chase did not properly code the account in their system.

I would not expect the account to be removed from your credit report for seven years and the balance will be reported and it will continue to accrue interest and grow.

With the Chase confirmation in hand MMI should have fought the battle to have the account pulled back and reinstated. Did MMI fight for you on this?

Since you’ve already taken the credit report hit on this and paid the tax liability, if you have the cash on hand to pay at least 50% of the debt then you might want to think about a debt settlement approach. You may want to contact one of the AACC companies for help. They put consumers first.

Please post your responses and follow-up messages to me on this in the comments section below.

Sincerly,
Steve

You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.




About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

Leave a Comment

Scroll to Top