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It happened again this week. The client comes into the consultation smiling broadly. He just needs help with a loan modification, he argues. He doesn't have any other debts. "Look," he says, pointing at his credit report, "it's been charged off!"

Sorry, that's not what it means. A "charge off" is an accounting entry by the lender declaring that the debt is uncollectible, a determination that helps the lender deduct it as a loss against his taxes.

The "charged-off" account is still a live debt of the borrower until such time as the statute of limitations runs out and that can vary from three to seven years and depends also on the type of debt. In this area -- Maryland, Virginia and the District of Columbia -- you will need to check the law in the jurisdiction in which you reside.

So, remember, you are still "on the hook." In fact, many of these debts are sold to debt investors at a large discount, such as Portfolio Recovery Services, Midland Funding, Portfolio Recovery, or LVNV Funding who make it a business to recover on this stuff via lawsuits and other means.

Also, it may be more harmful on your credit report as a "charge off" than actually eliminating all legal liability and having it read "discharged in bankruptcy."

One of the factors a mortgage lender takes into account when deciding on whether to grant a borrower a loan modification is that borrower's "back end" ratio. Too much other, non-home-related debt, such as charged-off, but still live debt, can nix the modication.

So don't rest easy just yet. Consult an attorney knowledgeable about debt issues, and see what the options are to deal with this.

Due to a massive federal settlement regarding foreclosure abuse, checks for 4.2 million mortgage borrowers, thousands of them in Oregon and Washington, will soon be in the mail. In most cases the checks will only go a small way towards repairing the harms suffered to date.
The agreement stems from a federal investigation of the robo-signing scandal. Robo-signing was the process that allowed mortgage servicers to foreclose on Oregon and Washington homeowners without properly prepared documents.
The settlement itself will dole out nearly four billion in cash to borrowers whose primary homes were in any stage of foreclosure in 2009 or 2010 and whose mortgages were serviced by Aurora, Bank of America, Citibank, Goldman Sachs, HSBC, JPMorgan Chase, MetLife Bank, Morgan Stanley, PNC, Sovereign, SunTrust, U.S. Bank and Wells Fargo.
These payments will range widely from a few hundred dollars to over six figures, depending on how much harm a borrower potentially suffered.
One issue raised for victims in both Oregon and Washington by this settlement is whether many of the potential recipients of settlement checks who went on to file bankruptcy after they were harmed by their mortgage servicers will now be able to hold onto their checks.
If you do receive a check from the settlement and you have filed Chapter 7 or Chapter 13 Bankruptcy in the last few years, it would be wise to check in with your bankruptcy attorney to make sure that it it protected. If you have any questions at all please feel free to give me a call or set up an appointment on this website.
The original post is titled Foreclosure Settlement for Oregon and Washington , and it came from Oregon Bankruptcy Lawyer | Portland, Salem, and Vancouver, Wa .

Bankruptcy may help reduce your vehicle payment but your mortgage payment may not have the same option.  In other words, depending on which chapter you file you may be able to have your vehicle payment reduced, reaffirm your loan agreement with the lender, or set up a payment arrangement that helps you get caught up [...]

 
House committee deals major setback to payday, title loan reform bills | The Montgomery Advertiser | montgomeryadvertiser.com.
Ok, so this is the committee hearing that I testified at yesterday.  This  public hearing was to hear comments on the proposed legislation to cap the interest rates on payday loans at 36%.  Yep, 36%.  Sound high?  Considering the current payday loan interest rates range from 200% to 780%, this is relatively reasonable.
Just to give you a little perspective, I rarely foray into the realm of politics.  I consider myself a non-political person primarily because politicians have disappointed me more times than I can count, and I am just too jaded to believe that anyone in public office is there for the good of the public interest.
Notwithstanding this lack of political excitement, I couldn’t sit back and allow something so destructive to be given a legal pass.  Well, yesterday, I got an eye-opening look into Alabama politics.  Before testimony even began I became aware that the committee of representatives had already decided to send the bill to sub-committee to die.  Although faced with overwhelming public support of payday and title lending reform, overwhelming testimony in support of reform and a bi-partisan effort to get the legislation passed, the committee decided to be persuaded by the industry money lobby who could only produce one person in opposition to the reform who basically said the consumer chose this option and therefore it should be legal.
It’s a little disconcerting to look upon a table of lawmakers who had already made up their minds and were just suffering through procedures (I swear I could see one lawmaker making a grocery list…).
Ok, all the icky political machinery stuff aside, I’m so proud of Alabama Appleseed, Alabama Arise, Alabama Republican Women, Alliance for Responsible Lending in Alabama and the Southern Poverty Law Center.  It was through the efforts of these guys along with Rep. Patricia Todd and Representative Rod Scott that we are even seeing this piece of legislation.  So, on behalf of all those people I represent that have been defrauded, harassed and lied to by the payday and title loan companies, thank you, thank you, thank you.