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Can HELOC charge-off occur several years after a delinquency

A charge off was showing your credit reports without notification can be shocking. But is it a mistake or can a HELOC be charged-off years later after a delinquency.

Question: 2012-2013 we were having troubles making our payments on a HELOC, we worked with our lender to get everything reset to payments we could afford and have been making payments ever since then. This month I received an update on my credit score that this account had been charged off. When I called to ask what was going on they stated it was because of the late payments from 2013. 6/29/18 is showing as the closed date on my credit report and I am still receiving regular statements from them. Does this seem right to you?

I would advise that you consult an attorney. I’ve never heard of such an action. It appears they continued to hold the prior delinquency against you while accepting a payment arrangement for that delinquency.

You may want to dispute the accuracy of the reporting before consulting an attorney. The company needs to clarify what has occurred.

The Fair Credit Reporting Act gives you the right to dispute directly with the creditor. The creditor must respond within 30-days to either verify the reporting as accurate, correct the reporting or delete the reporting.

Here is a sample of the dispute letter to send directly to the creditor:

This is dispute as per the Fair Credit Reporting Act, Section 611. While reviewing my credit report I discovered a charge-off notation for account no. XXXXXX as of June 2018.

Please delete this charge-off notation as I believe it is in error for the following reasons:

  • Since 2013 timely payments have been made, per payment arrangement.
  • No current notifications were sent stating the account was delinquent and in danger of being charged-off.
  • I continue to get regular statements requesting payment since the June 2018 charge-off notation was placed on my credit reports.

Clarify exactly what actions led to a charge-off notation being placed on my credit reports.

What is the first date of delinquency (DOFD) associated with the charge-off notation placed on my credit reports.

Please note you have 30 days to complete this investigation as per FCRA, Section 611 or the account must be deleted from my credit reports.

Your name (typed, not signed)
Social Security Number

The reason you want to ascertain whether the DOFD is a current date or the 2013 date is that it determines the 7-year credit reporting time limit of the charge-off.

If it’s the 2013 date, then the charge-off recently placed on your credit reports must be removed in the year 2020.

Once you receive a response, you’ll have better direction in which to go plus, you can begin making complaints with the Consumer Financial Protection Bureau, Better Business Bureau and your state attorney general if the outcome is unsatisfactory.

Good luck to you!

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