Am I still liable for a charged off account?

Submitted by Anonymous (not verified) on Tue, 02/24/2009 - 23:58
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I remember being told once that a charged-off account means the company has accepted this as a “bad debt” and received government relief in the form of a tax write-off while filing their taxes for this bad debt. If I am still liable to the company for this debt, isn’t there a conflict? Doesn't them getting a tax relief for a bad debt and yet still demanding I repay this debt give them a "two-for;" tax relief, while knowingly going after the debtor (me)? Could a regular citizen get away with the same scheme? Is this bad, or even, suspicious accounting practices?

My oldest brother Rufus Martin then died in a tragic barge accident, so we took in his youngest son, a teenager. We were a two income family, and then my wife was diagnosed with cervical cancer (stage 3B) in January of 2001. We both worked at Safeco Insurance Company and were able to pay our bills.

Safeco then let my wife go while she was on long-term disability, which devastated us financially. I explained in a letter March 9, 2004, to Roy Firestone at Prestige financial that I would like to voluntarily repossess our car as I had also been unemployed since November of 2003. I stated would detail the vehicle and returned it with the keys to Huling Brothers Buick Pontiac GMAC, 4545 Fauntleroy Way SW, Seattle, WA. 98116 and could not keep up with the bills. Mr. Firestone looked over the vehicle and stated that everything should be alright.

I then looked at the contract and marked was “non-recourse contract”. It had two x’s on it, which means that was their intent. I looked this up and it states that once a property is returned, no further action can be taken against the debtor. I returned the property on March 9, 2004, which I had date stamped at the Snohomish County District Court, in my answer to their law suit.

My wife and I are now both on Social Security and my VA pension. I tried to work last year and permanently injured my back, so I receive L&I until I get social security, because my doctors at Virginia Mason Hospital and the Veteran’s Administration Hospital say I am unemployable.

I currently take 7 different medications for pain, depression, anger, insomnia and anxiety with manic attacks.

No judgment against me came, as a result of their lawsuit, yet I received a letter dated February 16, 2009 stating the loan was charged off and that I owe $11, 504.13 for a vehicle I originally bough for $6, 634.25, on September 6, 2002, while I was in a bankruptcy filed in June of 2002 and discharged in 2003. They knowingly gave me a loan when they knew I was in a bankruptcy. I realize my responsibility, but I was on trazadone and other anti depressants; my brother tragically died and my wife fought off cancer which I was by her side everyday for six months getting radiation and chemotherapy at Virginia Mason Hospital, with the amazing Dr Howard Muntz, Dr. Malpass, and Dr. Pham.

Can this Prestige Financial do what they are doing? When this has already been resolved in March of 2004, and also the fact that we only receive disability pay? :oops:

If the statute of limitation on the debt has not expired, the creditor can sue you and bring judgment against you to recover the debt. Charge off does not mean that you need not pay back the debt. In fact even if your account is charged off, the creditor can sell off the debt to a CA, who can sue you and recover the debt. Only if the creditor charges off the debt, you need to pay tax on the amount that has been written-off (tax will be on the amount that exceeds $600).

Thu, 02/26/2009 - 12:34 Permalink

Your credit score was not affected till 2003 because bankruptcy got listed in your credit report in 2003 when it got discharged and not when it was filed. The creditor has provided you the auto loan on the basis of the credit report before the bankruptcy got listed in your report. Now, as Scott said, even if the creditor charges off the debt, you need to pay it off, else the creditor can bring judgment against you to recover it.

Fri, 02/27/2009 - 03:17 Permalink
jeff71 (not verified)

im confused as firstlisten stated above he bought a car in 2002 for 6,634.25 and now 7 years later he is responsible to pay this company 11,504.00 for a vehicle he returned back to them years ago.this dont make since to me.if he is required by law to pay this amount back then by law they should give him a vehicle with the value of 11,000 i agree he should have to pay it back.(if he hadnt)returned the vehicle back to them in the first place.but he returned it back they accepted it.now i think he shouldnt be responsible.

Sat, 07/25/2009 - 03:07 Permalink

I would have thought you would have been protected by the "no recourse" part of the contract. Have you tried contacting the original creditor and asking about this? You may also call you atty general or contact a lawyer to see if they really have any legal options.
Usually when they reposses a car they sell it at auction for a certain amount and then contact you to pay whatever the difference was but if it was listed "no recourse" then I am not sure if you would be responsible. I certainly would contact the origianl lender and ask.

Tue, 07/28/2009 - 13:49 Permalink
tjapukai (not verified)

I am no attorney, but if you signed an agreement with no recourse you should be free and clear of anything related to this debt.

Normally in a repossession, the vehicle is collected and then sold. The difference from what the vehicle is worth to what you owe, loan amount, interest, penalties, and fees is what is owed.

It seems with the difference in the amount owed someone is trying to get you in the rear. Don't bend over and take it.

First, take the for of "no recourse" to a friendly lawyer. The sue them right off the bat on a contingency basis with your attorney. This eliminates the smoke and mirrors effect of the scumbag lawyers (and they all are)

When you enter into the world of collection companies and lawyers they are all dirt bags and none of them can be trusted. They are just tools that you have to use to leverage one against the other.

Just because someone tells you this is how it is doesn't mean it is the truth.

Tell the lender that is trying to collect to SHOVE IT!

I hope this helps.

G

Sat, 06/26/2010 - 01:38 Permalink
firstlisten (not verified)

I'm now a 100% disabled veteran. I was a full-time student (Veteran's Rehabilitation Program/Chp 13) and I tried to work, but because of my credit could only work as a Security patrolman). I got injured on the job because of my being an 80% disabled veteran at the time and the 40lb bollards I had to unlock and put them in place to lock up city parks. On September 7, 2008, requiring me to be on L&I, then back surgery. My L3 disc had protruded into my L3 nerve root. It took them a year to see this, which at that time caused permanent nerve damage.
They gave me a $20,000.00 settlement, which has resulted in me taking arthritis and surgical pain meds, depression pain meds, anger pain meds and the abilty not to run anymore.
I injured my left knee as well, but the VA said to do any more surgeries on my knees would cause more arthritic pain. They say later, I will have two knee replacements and now I'm am 100 disabled by the VA and by Social Security.
My wife beat cervical cancer, but now has Cutenous angio sarcomia (1-5 year expiration date-now at 1 1/2 mark), which is incurable.
We only get disability pay, no earned income pay for the rest of what's left of our lives. Prestige Financial came after me again, stating even though they can't take my disability payments, they just wanted a judgement again me, most likely to take my regular Social Security when I turn 65 or 70, when that clicks in.
Can they do that, at that time?

Mon, 09/06/2010 - 21:41 Permalink

Hi firstlisten,

No just like your disability payments, your Social Security Income cannot be taken too. However, garnishment laws vary according to state. Thus, you need to check out your state garnishment laws.

Thanks,

Aaron

Thu, 09/09/2010 - 09:17 Permalink
Barbara Jordan (not verified)

I am trying to sell a house my parents left me but my siblings had to sign off in agreement of the sell because of certain legalities. Long story short one of my siblings debts are holding up the sell of my property. I want to know why am I responsible to pay his debts and why are my siblings credit being checked. On all of my brothers accounts it is showing charged off....Help me to understand why I am liable to pay in order to sell my house.

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