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Answered 2011-09-13 00:47:13

Statute of Limiations does NOT mean the debt can't be collected or is no longer due. It simply means that they cannot use the courts to get a judgment to collect it.

The charging or writing off of a debt is only a required accounting entry by the creditor.

It does not effect you, or change the amount you owe, or that you owe it.

It does not change any of the legal methods to force collection that were available before making the entry.

It does not change any of the creditors rights, or change your obligation in it. The debt is NOT forgiven.

All it does is make the creditors accounting statement recognize that an asset (your receivable) that it expected to realize, and already recorded as income, is not going to happen. they are taking the charge to their books for the expense of your not paying, or that it is now considered unlikely you will ay, and the asset does not exist (or in bank terms, is no longer productive).

When the charge off occurs depends on many things in accounting parlance...most companies actually establish an account for expected bad debts (an accrual) as a current charge against sales, (expecting some to go bad), and adjust that account on experience...without having to do much on any particular account.

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