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Can debt collectors collect on a debt after it has be charged off?

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2011-04-19 17:54:02
2011-04-19 17:54:02

Yes, A charge off simply indicates that the debt has been written off the creditor's account as uncollectible. The debt can then be sold to a collection agency for pennies on the dollar. The 'buyer" of the debt will then pursue collection action by whatever means is allowed by the laws of the state where the debtor resides. Such action would be phone calls, letters and in many instances a civil suit for the debt owed.

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Yes, a 'charge off' does not invalidate the debt nor the legal rights of the creditor to collect that debt.

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Charged off accounts can still be sold to third-party debt collectors for collection. Nothing precludes them from attempting to collect on a charged off account. The collection agency that is contacting you would have to be licensed in the State of Maryland to conduct business. You can obtain licensing information on the Maryland Commissioner of Financial Regulation website.

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Yes, a "charge off" does not indicate that the debt is no longer valid. The creditor has several options on how to collect monies owed after the account has been charged off.

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If a 1099-C form was received then you are required to pay taxes on the amount shown. This is done when a debt is considered cancelled. A cancelled debt cannot be pursued for collection. ALthough there is no guarantee that unethical collectors wouldn't make an attempt to do so.

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Yes. A charge off simply charges off the debt with the original creditor but just because it is charged off the creditor still can take action to collect on the debt.

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If they obtain a judgment against you, some state's houses are protected

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Yes. The term "charge off" does not mean the debt is not valid and subject to collection procedures, including the possibility of a lawsuit.

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Just because an account is charge-off does NOT mean the debt is not being collected upon or that the debt is expunged. Charge-off accounts are often sold to collectin agencies or junk debt buyers who will subsequently try to collect on it. Paying a charged-off debt will not help your credit scores. A status of 'paid charge-off' or 'paid collection' is still a negative. A mortgage lender may look more favorably upon accounts like these, but paying won't remove the tradelines or increase your scores.

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Debt that is charged off plus 180 days can be removed after seven years but a creditor may be able to collect on the debt up to 10 years [depending on state SOL]

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Yes, the term is used to indicate a debt being written off as uncollectible by the original creditor. The debt however remains valid and subject to collection by a collection agency working for the original creditor or a third party that buys the account.

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If the debt has been cancelled, no; if the debt has been charged off, yes.

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Filing bankruptcyI may be wrong on this, but my understanding is that "charged off" simply means the creditor has written the debt off (as in written it off as a loss on their taxes, or turned it into their insurance company as a bad debt, etc.) but in no way affects the collectability of the debt. I suspect if they later collect on a charged off debt, they have to claim the money they receive as income on their taxes since they wrote it off earlier. I may be wrong about this though... I definitely don't think that "charged off" means "forgiven," though. Please note that nothing in this posting or in any other posting constitutes legal advice; this is simply my understanding of the facts, which I do not warrant, and I am not suggesting any course of action or inaction to any person.

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When a business has debt to collect, it is listed as accounts receivable on their books. This is considered as asset. When it becomes clear that the business cannot collect the debt, it must be written off as bad debt. This is done to remove it from the AR listing.

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It will show on your credit report where your bank loan was "Charged Off". This means the bank wrote off the money and gave up on collecting it. However they can sell that debt to a collection agency to try and collect it. It will show on your credit report for 7 years.

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No. The term "charge off" simply indicates that the creditor has decided to pursue other methods of collecting the debt owed. That could mean the debt will be sold to another party, the creditor could file a civil suit to collect the debt or other actions. Debts that are "charged off" remain valid and subject to collection unless they have been rendered invalid by the statute of limitations as determined under the laws of the debtor's state.

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Yes, because all that charged off debt is just charged off by the original lender, not for the entire world. They will sell it for some amount of money to collections agencies in orde to get something and write off the balance of the debt on their taxes as a loss which you have to in turn enter charged off debt as income unless you pay it back. The collection agency starts the process all over and the seven years starts all over too, to infinity and beyond...It never goes away unless it is legally disccharged off through cp 13 or 7 bankruptcy unless is a student loan, federal IRS debt, child support, judgment, etc...

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Yes, the term "charge off" does not render the debt invalid or uncollectible.

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I don't know what state you reside in, or how the debt is classified However, it seems possible that the SOL has expired. Write the company and ask for a confirmation of the debt. Don't do anything until you receive it, and check the SOL in state pertaining to the type of debt you have.

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Yes, if the creditor sues the debtor and is awarded a judgment, the judgment can be executed as a lien against real property owned by the debtor. A "charge off" does not mean a debt is not valid nor subject to collection.

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There is no time limit placed on their collection efforts to collect a debt. However, there is a SOL for legal recourse and for how long it can report on your credit reports. Reporting time is 7 years and so far as the SOL for legal recourse you would have to check your state laws to see how long.

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If an account is charged off it is automatically closed. It is listed as uncollectable debt.

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Yes. Being "charged off" is merely an internal accounting term to indicate that the amount owed should not be carried as an asset of the company. It does not mean that the debt itself is discharged. Companies will charge off debts because they cannot keep inactive accounts on their books indefinitely. But after they do charge them off, they either sell them at a discount to collection agencies, try to collect on them themselves, or forget them. But they can sue. If a collection agency comes after a debtor on a charged off debt, the debt can probably be settled for a lot less than the real amount. This is because the agency probably bought the charged off debt for less than half of the amount. If the debtor offers an immediate payment of say 75%, the agency still makes money on the difference between what it paid for the debt and the amount it gets from the debtor. Agencies want quick money with the least effort, so if it can make one phone call or write one letter and get more money for the debt than they paid for it, they will do it.

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I have a charged off account at the bank of 146.00 how do I pay that off when I'm unemployed I have a charged off account at the bank of 146.00 how do I pay that off when I'm unemployed

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Yes. "Writing off" debts to bad debt is a bit of accounting legerdemain, and not a legal waiver. Typically, original creditors only sell debt or sell the right and power to collect on debt after they have written it off.

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A charge off does not relieve you of the debt. It is a term that banks use to clear defaulted accounts off of the books. As a general rule, the account is sold to a third party. That agency will continue efforts to collect the debt. The charge off/debt will stay on your credit report for seven years. The state you live in is only relevant if any legal action such as a lawsuit is taken.


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