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.
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]
The definition of the term bed debt expense, is when a creditor for example, has made every reasonable effort to collect the debt, but has failed to do so.
No it is NOT! You have to get your credit report to see when the creditor last updated their report to the credit reporting agency. If the creditor chooses to report this bad debt every month than your bad debt will only be erased from the last update. For example: You have a bad debt from a Sears credit card from Jan of 2010. Each month Sears has reported your bad debt to Trans Union or one of the other agencies. The new date is from the last time they updated your credit report NOT from Jan of 2010. They can update it every month for the next 20 years and it will stay as a bad debt and ruin your credit report score. Legal to do it too.
Yes. A 1099C is confirmation from the creditor or lender that the debt has been cancelled and collection efforts have ended. The bad news is, the amount shown on the 1099C is considered taxable income and must be claimed on your federal tax return.
"Written off" does not always (usually) mean a debt is not still collectible. The term "forgiven" indicates that the creditor no longer considers the debt valid. When a debt is forgiven the debtor will receive a 1099C from the creditor/collector and a copy is sent to the IRS.. The debt is then considered income and must be reported on the debtor's tax return as such.
Sure you can be sued. Any debt collector may sue you for amounts owed under a debt they have purchased from your original creditor. They can pursue a judgment, which is a court order to repay the debt. You may wish to check with a licensed attorney, since North Carolina has some restrictions on garnishments that other states may allow.
A bad debt can be collected on indefinitely. The debt is owed until it is paid or written off by the creditor or individual.
yes
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]
= If your credit report reports that you have a bad debt write-off, then it means that the original creditor has written off the debt, but they can still sell the rights to the debt to a collection agency and they can contact you and take legal action.
The statute of limitations for how long a consumer may be sued over a bad debt is established by (their) state law and type of account. You can do an internet search: statute+limitations+(your state)for more information.
The definition of the term bed debt expense, is when a creditor for example, has made every reasonable effort to collect the debt, but has failed to do so.
better to settle with creditor first
Bad debt means debt that is not collectable. Placed for collection means the debt has been sent to a collection agency or department. Skip means the creditor cannot find the debtor and will use different methods to locate the debtor.
No it is NOT! You have to get your credit report to see when the creditor last updated their report to the credit reporting agency. If the creditor chooses to report this bad debt every month than your bad debt will only be erased from the last update. For example: You have a bad debt from a Sears credit card from Jan of 2010. Each month Sears has reported your bad debt to Trans Union or one of the other agencies. The new date is from the last time they updated your credit report NOT from Jan of 2010. They can update it every month for the next 20 years and it will stay as a bad debt and ruin your credit report score. Legal to do it too.
Under the allowance method bad debt expenses are charged to allowance for bad debts accounts instead of profit and loss account because profit and loss account is already charged with the allowance amount created.
Yes. A 1099C is confirmation from the creditor or lender that the debt has been cancelled and collection efforts have ended. The bad news is, the amount shown on the 1099C is considered taxable income and must be claimed on your federal tax return.