Suitability Question - Credit

I am going for a suitability and only had to complete an OF306, SF85. I was asked to also fill out FCRA. I have two old accounts from nearly 7 years ago that are charged off. One account falls of my credit report in two months and just over $5k is owed. Another falls off my credit report in May and it just over $1000. I plan to pay the $1000 off immediately. Because the $5k is old enough to fall off in 2 months, can I let it fall off or must I set up a plan to pay this? What do you suggest I do about the $5k owed account that will fall off credit in 2 months?

Failure to pay your debts is going to raise a lot of questions.

Even though a charge off is taken off your credit, you will always owe that money to whomever initiated that charge off. I had a charge off and if I had not been making payments towards it on a payment arrangement plan for a good while before my investigation, I most likely would not have been eligible for my clearance or just be denied. I’ve heard that even settled debts/charge offs…if settled for less than what was owed, can still raise a red flag as the debt was not paid in full, this showing lack of financial responsibility. All they want to know is that one has some sort of payment history or plan to tackle the debt, as if not taken care of, would make the potential clearance holder seem negligent in their eyes.

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I’m not an expert but from what I know the issue with delinquent accounts is more along the lines of an active situation that can be used to pressure coerce you in some way. If an account is charged off it’s no longer a situation that can pressure you into doing something desperate. A similar situation would be a bankruptcy which causes the accounts to no longer be a stress. You still have to list the accounts on the questionnaire and explain why you didn’t pay if it’s within the past 7 years. If there are only 2 months left I personally would let the account fall off. I’m sure I’ll get blasted for saying this but whatever…free speech (for now anyway).

The “charge off” is still an unresolved debt that indicates possible irresponsible behavior. This is also a debt that is still owed.

Bankruptcy, while always a major issue, is not the same as a charge off. The reason for the bankruptcy is everything in the adjudication. Also, the behavior after the bankruptcy is closely scrutinized. Having new delinquent debt after a bankruptcy is not good for your adjudication.


There’s another angle to this, and that is the fact that under certain circumstances forgiven debt can be considered “income” and there may be some kind of 1099 generated for tax purposes. If the individual fails to report this on their tax return that could be another issue.

I do not know if this applies to a “charge off” but keep an eye out for the 1099 or other tax form.

Good point, but trust me, ignoring or waiting debt to fall off will always bite ya in the rear when it comes to a TS investigation. Very rarely, will they let it slide, but then again, anything can happen…

Your advice is harmful.

A “fall off” doesn’t make the debt disappear. Once owed, forever owed, until paid in full.

A debt may fall off a credit report, but it will re-surface when it comes into possession of the next collection agency. Stale debts are big business.

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It hasn’t been paid in nearly 7 years anyway. “What’s the reason you’re paying the account after 7 years?”… Because i want my clearance???..(tomatoe-tomahhto/potato-potahhto).

Facts. Some people just do not seem to understand, oblivious really, and just believe themselves…which is the quickest way to having the clearance delayed or even denied.

This is not just a clearance… No need to give such false hope and advice. In the adjudicator’s eyes, it can be 7 years or 17 years…a debt that is not paid shows negligence and lack of ownership, always a red flag.

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I passed and am actively working on the account.

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