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A creditor will charge off your account based on their accounting standards. Some creditors may charge off an account if no payment has been received within a 90 day period. Some others may wait a year. Your problem will be, if a charged off account appears on your credit report you may pay a higher rate of interest when you go to purchase a car, or perhaps a home. Be aware that if the one you owe charges off - generally called "writes off" the debt, it means they accept that it is uncollectable and for accounting purposes it is a charge/cost and a loss of earnings or revenues. It does NOT mean the debt is forgiven, only that they accept it is worthless, or more rightfully worth less to collect than collecting it will cost. They may sell the right to collect it to another, generally a collection agency. So if they determine a debt of $100 is uncollectable, and they sell it to a another for say, $15, they only have to charge off (take a loss) for the $85 net (and any expenses so far incurred). the one who now onws it has the right to collect it and keep however much they do.

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โˆ™ 2007-02-01 09:20:52
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Q: What does it mean when a creditor charges off a debt?
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Related questions

Can a collection agency put a lien on your house because of a charge off?

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.

If a creditor charges off a debt can they still go after you for repayment?

Yes, the designation "charge off" does not make the debt owed invalid or uncollectible in any context.

Can an account be in Charge Off Status if payments are behind but being made?

Yes, it can. Just because a creditor charges off your debt, does not mean that you don't still owe it. Before you pay on a charge off, make sure you get an agreement from the creditor to delete it from your credit report once it's paid!

How can you find out if a debt has been written off?

The term "written off" does not mean the debt has been cancelled/forgiven. The term indicates that the original creditor will no longer continue to collect the debt in the usual manner. The debtor will receive a notice from the original creditor of whatever further action will be taken with the account.

If a creditor has written off your debt can a collection agency then come after you for the amount?

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

Are bad debts that are written off taxable or not?

"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.

What does a charge off mean on my repo'd car?

Your creditor added a negative entry (a charge-off) to your credit report and will continue to attempt to collect on the debt.

Can a creditor keep reporting a charged off account?

That is perfectly legal. The term "charge off" does not mean that the debt is not still valid and fully collectible.

Can you be sued for a charged off credit debt by the original creditor?


What is a charge off on your credit?

A charge off is when a creditor basically gives up trying to collect the debt and "charges off" the debt from their books. They do this more for their benefit than the one who owes. It allows them to close out the file and clean up their records. This looks especially bad on a credit report.

Can a creditor that has charged off a debt continue to collect and put a lien on real property?

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.

If a debt on your credit report says 'bad debt write off ' can the creditor still sue you or collect the money?

= 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.

Will an unpaid charge off eventually be waived?

A charge off is an account that the creditor has decided not to collect on. When they are listed as a charge off, that does not mean anything to you except a ding on your credit report. You are still obligated to pay the debt. What usually happens is a third party debt collection agency will make arraingments with the original creditor to come after you. This can be a double dip on your credit report because the original creditor might list it and the debt collector might list it also.

How many years does it take for a debt to be written off?

There is no set time for a creditor/lender to cancell a debt. Charge offs are generally done 180 days after the account becomes delinquent. A Charge off does not mean the debt is not still owed and collectible.

Can you still be sued if a credit card company charges off your account?

Yes, a charge off does not prevent a creditor or collector from filing a lawsuit against the debtor to recover debt owed. However, all states have statute of limitations that establish the time period in which a creditor may file a lawsuit.

How long after bad debt can it be collected?

A bad debt can be collected on indefinitely. The debt is owed until it is paid or written off by the creditor or individual.

Can you be sued after a bill was charged off on your credit record?

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

Should you pay off a debt that is already listed on your credit report as charged off?

A debt being designated as a "charge off" does not mean the debt is not valid and collectible. Collection of the debt will still be pursued either through an agency contracted by the original creditor or a third party purchaser. The creditor/collector has the option of filing a lawsuit against the debtor to recover monies owed as well as using common collection practices such as telephone and written correspondence.

Can a debt collector in the state of Michigan collect on a debt if they have already charged it off?

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.

What does a charge off with a zero balance mean?

A charge off with a zero balance means that a creditor has written off your account as a bad debt. This will show up as a negative mark on your credit report.

What is the length of time a creditor can collect on a debt before it is wrote off?

6 years

How long after a charge off can a creditor sue?

Charging off the debt has not impact on the creditor's ability to sue. Charging off is simply a write-off for tax purposes. A creditor can sue any time prior to the expiration of the statute of limitation regarding of whether or not the debt has been charged off. The applicable time deadline will vary from state to state and depending on the type of debt.

If the collection account keeps being sold to another collector at what point does the statutes of limitation start?

An SOL for debt begins from the time the original creditor charges off the debt. It does not begin over when a debt is sold to a third party collector. It can restart if the debtor pays or in some cases agrees to pay any amount on the debt owed.

How does a Sub S corporation pay off a debt that is on the books?

Writes a check and sends it out to the creditor.

If a debt has been written off as bad debt on taxescan a creditor seek payment after they have written it off?

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.