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Collections Law/confusing charge off


Hey Ray,
I know I should probably be contacting the bank itself but I'm not sure how these things work and honestly don't trust them to give me a straight or fair answer regarding a debt to them. Forgive me if I'm a little long winded here.

I live in New Jersey and opened two credit cards through Wells Fargo in 2011. I was in college and irresponsible and went way over my balances, fell behind on my payments, and the cards were ultimately charged off in April 3013 and June 2013.

In May 2014 I became in a position to start paying off my debts, but realized I couldn't find/hadn't recieved any collections letters regarding these accounts. I then contacted the bank to try and figure out what collections agency had my accounts and was told that they were still scheduled to be charged off BUT that the bank was STILL IN POSSESSION of the accounts and that I could set up a payment plan with them directly. I did, and have been paying on both accounts on time for the past 6 months.

I recently requested my credit reports to try and figure out where I stand in terms of credit and noticed that both accounts have been reported as charged off since April and June 2013 when I first received notice.

Now, I might be mistaken and sound like an idiot here (which is why I'm contacting you instead of the people I'm paying)...
But If the bank tells me they are in possession of my accounts which are SCHEDULED to be charged off but have NOT been charged off YET and I make a payment plan to pay the bank DIRECTLY... why are they reporting them as charged off? My credit report acknowledges that I have been sending payments and has "last payment received" listed, etc... so I'm even more confused.

Is this something I can dispute? I would have expected them to be ACTUALLY charged off in the year between my receiving notice and my contacting the bank (and in that case would understand the charge off appearing on my report)... but I was up and down assured that they hadn't been charged off yet and the bank was still in possession, etc, etc.

I don't know what to do here.
Sorry for being long winded and rambly, but my credit's all messed up and I'm looking for any way to fix it/remove incorrect reports.
Thanks again,

No problem with being long winded; too much information is better than too little.  The bank can charge your account off and still maintain control of it.  It is just a bookkeeping term. They do not want to carry too much delinquent debt on their active books.  Being charged off and being delinquent will have the same effect on your credit history, so I would not worry about it too much.

I would, however, suggest three things for your consideration:

1.  Keep a complete collection "diary" on these accounts.  Document everything you say and do. Document dates, times and who you speak with along with any written correspondence.  This could prove to be invaluable in the future.

2.  Contact the bank, in writing by certified mail, documenting the terms of repayment as you understand them.  Include in the letter the balance, due date of the payments and the amount of the payments.  Include the fact that they have agreed not to turn these accounts over to an outside agency or sell them.

3.  Consider obtaining a lump sum of money and offer Wells Fargo a settlement. Start off offering them 30% of the balance and see where it goes.  The normal standard operating procedure with charged off accounts is that the bank will offer lumps of accounts for sale to a third party. The normal amount they receive used to be $00.06 to $00.12 on the dollar. I am guessing is it still somewhere in that range.  30% of the balance might look good to them.

i wish you the best with this situation and I am available for followup questions at any time.  Have a nice Thanksgiving!

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Ray A Miller


I am qualified to answer questions on the following subjects: FDCPA, FCRA and HIPAA as well as medical collections, general collections and collection agency related issues. I trained these subjects at a nationwide collection agency and customer service call center and audited around 150 representatives for compliance to the laws. I have been in the Collections Industry for over 30 years. I feel that everyone deserves to be treated fairly and with compassion and that is the way I trained collectors. Even though I worked for a Collection Agency, I get great satisfaction in helping those who have been mistreated or in need of help with these confusing issues.


I was the Compliance Administrator with a nationwide collection agency and customer service call center-I have trained hundreds of collectors on the above referenced topics. I have been in the medical collections industry for over twenty years and research these topics on a daily basis.

ACA International

Some college ACA Certified Collection Specialist

Past/Present Clients
I am retired due to medical conditions and spend a good deal of time keeping current on collection issues.

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