Question by Christina T: Should I pay Collection agency for a vehicle that has been written off as bad debt on my credit report?
I had to voluntarily hand in a vehicle from Chrysler financial. They have sold the vehicle and the remaining owed is $ 13,000. The Manager I spoke with at my bank (to get a loan from them) said not to worry about it that it was a collection agency and Chrysler had already written it off. She said that Chrysler is paying the collection agency to collect what ever they can if possible, and they will split it.
On my credit report, it does have a “paid-written off as bad debt” mark on the loan but, I’m confused… Do I still have to pay it back or can I forget about it??? Please help … This is my first blemish on my credit and I am scared about garnishing wages and such….
Best answer:
Answer by MadMan
They absolutely can sue you for the balance. You should have paid this off when the car was repossessed. The write off will be there for seven years. Most of the damage is done in that you defaulted on the loan. Paying off the balance will help you but it still looks bad.
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Yes you are liable for the deficiency balance of the loan, the $ 13,000. Chrysler sold the debt to the debt collector who now owns the debt and has every right to collect.
If the debt is not paid, and for that amount of money the debt collector will take you to court and sue. If judgment is won, and if your state law allows, your wages can be garnished up to 25%.
They can also attach and levy your bank accounts and lien personal property.
Depending on how old the debt is, try to get a settlement on the account. As a general rule debts that are 1-2 years offer 75%, 2-3 years offer 50%, older than 3 years offer 25%. If they agree get it in writing that the account will be considered paid in full and make sure you receive the paperwork before you mail then a money order for the payment. Never give a debt collector access to your bank account.
A write off or charge off is a federal law that requires lenders to record that charge after 180 days of delinquency for internal accounting and tax purposes. It does not relieve you from paying the debt.
If the lender forgives the debt, you will then receive a 1099-c indicating $ 13,000 was forgiven and you will then be no longer obligated to pay the debt. If you receive the 1099-c, you will be required to report that as income when you file your tax return.
im assuming they repossess the car? then they sold it. and the amount left owing is your responsibility. i would make a few more calls and get names and paper work.
Mike is right but I wonder how can be a 13 grand remaining balance, what was it a $ 100,000 Chrysler?
The wage garnishment is only possible on the states that allow it, there is five states where is not allowed North Carolina, Pennsylvania, South Carolina, Florida and Texas
Ask lenders for agreement to delete this items from your credit report when paying them. I recommend to get such agreement thru credit repair agency, for example this one – buildcredit.ifastnet.com