Transcription
Did you make this huge mistake and ruin your credit? You have been disputing a charge-off completely wrong this entire time. Jean-Claude is going to tell you, "Stop disputing the balance on a charge-off. It's the worst thing you could possibly do." And listen, I get it. Some amateur on social media told you, "You got to dispute the balance because a charge-off shouldn't report a balance. They must delete it from your credit report." If it was really, truly that easy, don't you think it would be gone already?
If you dispute the balance on a charge-off, all they're going to do is update it to be accurate and complete. And now you have ruined your chances of getting this item deleted from your credit report. On today's video, I'm going to walk you through from start to finish on exactly how to attack a charge-off properly. You do not want to miss any part of this because every part is crucial to the success of deleting a charge-off from your credit report.
This is not financial advice, and this is not legal advice, and I am not an attorney. This is for educational purposes only. I want you to understand that a charge-off is the highest level of delinquency possible to have on a credit report, of course, besides a bankruptcy. That's really the ultimate high level of delinquency. But you're going to hear a lot of amateurs on social media or people that are just straight up just trying to take your money, specifically say, "Oh man, give me 60, 90 days, I'll get rid of those charge-offs." Really? Are you serious? Are you Jesus? I'm sorry, am I talking to Jesus right now? Oh, I didn't even know that. No, they are absolutely full of it.
There is no way to know if you can actually successfully delete a charge-off within 60, 90 days. And it literally took six months for this item to turn into an actual charge-off. Do you really think that it's going to be able to be deleted in 90 or 60 days? That's just being really, truly unrealistic. You are in this for the long haul. This is a marathon, it is not a sprint, especially if you're working on your credit on your own and you don't have any tactics that a real, true professional has. And I want to be honest with you, really, really pay attention to this. Less than 3%—that's way too big of a number—less than 2% of credit repair companies out there actually know what they're doing. That's the sad truth about it. Ladies and gentlemen, they're most likely using my Metro to compliance software that they have no idea that I actually own. Let that sink in for a minute.
We need to dispute directly with the original creditor. The biggest mistake that people make is they go after the credit reporting agency after a charge-off. No, that is completely 100% wrong. We need to battle it out first with the creditor, and then we go after the actual credit reporting agency because, remember, the information starts with the creditor and then it goes to the credit reporting agency. This is why we go after the creditor first.
If your charge-off is with a debt collector, this does not apply to you. This is solely and strictly for charge-off accounts that are still with original creditors. If it's with the debt collector, you need to go the route of doing a debt validation, possibly a refusal to pay. This does not apply to you because we're going to go directly to the original creditor. They are the people that are going to get us the 1099-C.
You need to stop disputing specific attributes on a charge-off. An attribute is my favorite: the balance, the last date of activity, the first date of delinquency. Leave those items completely alone and do not dispute it with the creditor or the credit reporting agency as such. It is a waste of time and energy. If we tell the credit reporting agency what's wrong, they have two choices. Choice number one is going to be to update the item to be accurate and complete. Choice number two is going to be to delete the item. What choice do you think they're going to take? They're not just going to delete it and be your best friend. They're here to keep you down as a subprime borrower. That's how they make their money, selling your information to other reporting agencies and subprime lending companies.
A charge-off on a credit report has two different meanings. Number one, it could mean that the actual creditor, being an actual auto loan company, credit card company, a loan company, has taken a complete loss and reported as such with the IRS. And the creditor will actually send you a 1099-C in the mail, and it means that the debt has been canceled. But you need to call the actual creditor, actually ask them over the phone like, "Hey, um, I just received a 1099-C in the mail, um, about this actual debt that I had a financial hardship with. Does this mean that the debt is actually done and I don't owe any more money?" And once you get it on a recorded call and they say, "Yes, of course, yes, you don't owe anything else. That's what we send the 1099-C." Hang up the phone. Congratulations, the debt is actually satisfied and canceled, and you don't owe them anything else.
Meaning number two, if they did not report it to the IRS, then they have just reported it as a loss on their books, and they do have the right to actually try to pursue to still collect on it or possibly sell it to a debt collector. But if you did, in fact, receive the 1099-C, then guess what? The debt has been canceled and satisfied, and it has, in fact, been turned into taxable income. So I will tell you more towards the end on how to take care of that, so make sure you stick with me.
So if you did not receive a 1099-C, then the debt is still active, and we need to communicate with the original creditor and get them to forgive or cancel the debt. Last part is the most important. We want to send a very simple letter to the original creditor, not the debt collector, not the credit reporting agency. You want to sound like a human being. Don't use any templates, don't use any UCC nonsense codes that you got from somebody. Very simple letter. And in that letter, you're going to state, "Hey Mr. Creditor, it appears that this item on my credit report has turned into a charge-off, but I noticed you have never sent me a 1099-C. Would you be so kind to send me a 1099-C for a cancellation of debt of this item due to my financial hardship? I would greatly appreciate it. I've gone through a serious financial hardship, and this would help me with my credit in the future. Thank you so much." Sign it and send it certified mail with return receipt. Get it notarized at your local notary, which you can do at your bank for 100% free.
Also, do not, and I repeat, do not call the creditor and think that some rep on the phone is going to be able to forgive your debt. No. Don't be lazy. Follow the process. Don't come into the comments saying, "Oh, but I called them and they said this." I mean, come on, let's use common sense here. A representative is not going to be able to forgive your debt over the phone, not even a supervisor. This goes to the higher level people, and that's who makes the decision.
You can also send this in an email. There is a website called CEO Email. You can go into that website. It's 100% free. Do not click on the ads. It is 100% free to use it. You're going to search the database to find the actual creditor's CEO information, his name, his email, his phone number. It's all going to be on that website for 100% free. You send that actual CEO an email, make yourself sound like a human being, and then you wait.
Let's say hypothetically, you get the 1099-C in the mail. We're a go. Now, it's not very common that this happens in the first round, just going to be honest with you. It may take up to three to four rounds. Now, if you receive it, it turns into taxable income. There is something called a Form 982 of Insolvency with the IRS. Form 982 of Insolvency can be filled up by you or your tax professional. I strongly recommend that you have them fill it out. It basically means that you are insolvent, that your debt outweighs your assets. More than 90% of Americans are insolvent. So filling out this form will make you insolvent. You submit it to the IRS with your tax professional, and then you wait for them to accept it. Once they accept it, congratulations, the debt has been wiped away by the IRS, and it's no longer taxable income.
Now you received your 1099-C, you filed your 982 form of insolvency with the IRS. Now it's time to attack the credit reporting agencies: Experian, Equifax, and TransUnion. And now we're going to use that balance against them. This is exactly why you do not dispute the balance because now we are showing that they are reporting a balance, and guess what? We have proof with the 1099-C that the debt no longer exists. There should definitely be no balance reporting.
Now we're going to send a very simple letter to the credit reporting agencies. Remember, no UCC codes and no mumbo jumbo. You need to sound like a human being. "Hey Mr. Credit Bureau, I was looking at my credit report, and this account looks weird to me. The last date of activity, the last date of payment, the account number, the account balance, everything on this credit item on my credit report looks to be incorrect. Can you please delete this item from my credit report because it is not, it is not accurate and it is not complete? I greatly appreciate it." You sign your letter, you get it notarized at your local bank for free, and you send it certified mail, and you wait 30, 45 days. If you paid attention, we did not tell them exactly what was wrong because we want them to leave the balance on there because we're building a case against them.
Make sure that you make copies of all of your letters that you send out, and you also get those signed and notarized at the same time when you get your original letter done. You probably got a response in the mail about 30, 45 days, and they said, "Congratulations, this item is verified, it's yours. We did in fact see that it does belong to you." I never said it didn't belong to me. Didn't say any of that. We're going to send a very simple response again. No nonsense in the letter. You say, "On such date, I sent you this letter explaining to you that this item is not accurate and it's not complete, and I want this reinvestigated effective immediately because this negative item is impacting my credit reports, and I want it deleted immediately." Send copies of your first letter, all of your certifications that you sent in, and you're going to wait 30, 35 days.
Now you probably got some automated response that said, "This item is verified to be accurate and complete, and it is yours." Well, guess what? We never said it was ours again. So now you have two rounds in the books to prove that guess what? They did not do anything. Now you have a case. If you did, in fact, follow all these steps, reach out to our company, contact Limitless Culture Group. We will get you hooked up with a consumer law attorney at no cost to you. The crazy part about this is you may be entitled to thousands of dollars worth of damages. The attorneys take their fees out of whoever they have to sue. That's the best part about this. You're out of pocket for nothing, and then the item gets permanently deleted. That is the goal here. That's the whole purpose of getting the attorneys involved.
I hope you enjoyed this video. Make sure that you watch the next video because it is about how to delete collections, completely different subject. And if you felt that I brought you a bunch of value in this video, make sure that you don't forget and subscribe to increase your credit score.