Can a creditor report a promissory note on a ballon payment as bad debt?
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Answer:
Bad debt is a term used in accounting for a debt considerd uncollectable, and is typically reported on a tax return. If the payment wasn't timely made according to the terms of the contract involved, it may be reported as a delinquent debt. I am unable to provide a definitive answer without knowing all the facts and terms of the documents involved. If the promissory note was signed by the creditor, all parties agreed to the balloon and other payment terms, and the payments were made as specified in the note, then the debtor would not be in default and it would not be reportable as a delinquent debt.
If a creditor pays an amount due late, even if it’s the full amount, it may appear as a delinquent payment on a credit report. If a debtor offers partial payment for an overdue amount, the creditor may still seek to collect the full amount owed through collections actions or legal actions, such as garnishment. It is possible for payments due over time to become accelerated upon certain conditions.
If you believe information being reported about you is inaccurate, incomplete or outdated, you may challenge it by notifying the credit reporting bureau. USLegal offers forms for this purpose. Once placed on notice, the credit reporting bureau must verify the facts within a reasonable period of time or else delete that information. If you disagree with the outcome, you are allowed to have a statement (up to one hundred words) included as part of the report which the bureau issues in the future.