Legal Question in Credit and Debt Law in Texas

I have a old loan that my creditor (bank) reported to the IRS as a charge off. Shortly after that, they turned around and sold it to a third party collection agency. Is this legal? Now the collection agency is on me, and has ballooned the original balance to more than twice what it originally was.

Is it smart to pay this? My bank states they will not remove the charge off status, so I'm not sure if paying at this point is wise considering it should be dropping off my credit report in just under three years.


Asked on 5/02/11, 7:35 am

1 Answer from Attorneys
Greg Wiley Law Office of Greg Wiley PLLC

If you received a 1099-C from the charge off company, then it is potentially taxable income and an actual cancelled debt. If it is merely listed as charged off, it is probably just sold to a collection agency.

Best of Luck

Greg

www.dallas-fortworth-bankruptcy.com

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Answered on 8/11/11, 2:13 pm


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