Credit Advice

Have a question? Have advice to share? The combined knowledge and experience of everyone in the Credit Karma community can help you. Enter your question or help others below to get started!

Question

Posted in Credit Report
Profile Image

Question By
TG212

1 Contribution
0 People Helped
Charge off voluntarily removed from credit report early?!
First post, just joined a week ago! Back in 2012 Citi charged off my credit card account balance of $10k (I had a temporary blip in financial circumstances in 2012 and got back on track fairly quickly, but by then the damage had been done to my credit score). I was negotiating with the Citi CA (debt was officially sold off until 12/2015) last March about settlement options, but then my kids were born 8 weeks early so I had to amend my approach. I sent a letter outlining what I could afford financially and told them about my "situation" with my kids. I expected a answer back, it never came. I sent about 4 letters from April 2015-Sept 2015 with no response. A week ago, I signed up for Credit Karma, and was surprised to see my credit scores were considerably higher than they should've been imo (783 and 777, Experian is 794). I dug through my credit report and voila, no missed payments, no mention of a charge off or reference to collections. I am beside myself, did Citi voluntarily just remove this from my credit report?! Does that actually happen?!

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW
All Responses

Result 1-1 of 1Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next
Top Contributor
1884 Contributions
3672 People Helped
Most Helpful Response

Your letters may have had some effect

Helpful to 1 out of 1 people

But don't be surprised if it comes back to bite you.  

If indeed they did charge off the balance, There will be taxes to pay on it. A charge off is considered Unearned income to you. It can take a year or two for the paperwork to get filed. Generally it will be filed as a 1099 misc at the end of the year the charge off occured. It will then go into your IRS file but They will generally not notify you of it untill the end of the next year. So it sometimes takes 2 or more years before you have a tax bill for it.  If your state has income tax, then your state will be notified at the end of the next year. So be prepared for It.  The Taxes are about 38% so exect the feds to want around $3800.  Thats a steep price to pay but certainly less than the original amount. 

As to why none of this was not reported on your credit report is a mystery to me, Creditors generally don't let a balance that large to slip through the cracks.

Good luck  

Reply by
TG212

1 Contribution
0 People Helped

Thanks for the response! I was aware of the unearned income aspect of it, although I didn't know about the 2 year or more delay, great info. The amusing part is I was offering them $6,000 of the $10,000 owed, so I even come out ahead if I get a 1099 down the road! I'll be curious if anyone else has any input on why this mysteriously dissapeared from my credit report, banks aren't really known for their kindness & generosity, regardless of if we had preemie babies or not. 

Result 1-1 of 1Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW

Reply to this Question

Write your response:
Enter Your Comments

The Credit Advice pages of the Site may contain messages submitted by users over whom Credit Karma has no control. Credit Karma cannot guarantee the accuracy, integrity or quality of any such messages. Some users may post messages that are misleading, untrue or offensive. You must bear all risk associated with your use of the Credit Advice pages and should not rely on messages in making (or refraining from making) any specific financial or other decisions.