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If what you mean is if your have income from cancellation of debt, how is that taxed?
It is taxed as any other income...meaning you will pay at your "effective rate"...basically your income tax bracket.
(The one charging off the debt, normally a company, will only get, at best, their tax reduced by the amount they already paid on the income they thought they had coming....and hence "accrued" to income (as a receivable)...and now find they won't be getting/receiving.)
If what you mean is how much of a tax deduction does a company get by charging off a debt, that is more complex:
First the financial accounting requirments and the tax accounting requirements are different to allow the entry. TAX does not allow as a write off (an expense) tot he company as easily as financial. There is aomething called an "all events" test that must be met. generally it is many years after the books record the loss that the IRS will accept it for tax reporting.
TOviously, it is only acceptable as a charge against income to the degree it was reported, and tax paid on it, in some previous period. All that is happening - a previously recorded item of income is now determined to be worthless and never actually happpened. So the best case is the taxpayer gets the tax refunded that it overpaid some period before. And of course, it must have taxable income in this current period it is allowed to take it for it to even have any real effect. (Sort of doean't matter how much you lose, if your already losing money for taxes, you aren't getting to pay less than 0).
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∙ 11y ago
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Can a collection agency sue for a 'charged off' debt?
Yes, the term "charge off" does not render the debt invalid or uncollectible.
Can a debt be listed on your credit report by the collection agency as two separate entries with one as a charge off and the other as a collection fee?
Yes, the charge off is entered by the original creditor, and the collection fee is a separate debt.
What does a 0 balance charge off mean?
A 0 balance charge off means that the debt company has given up trying to collect the debt. It may sound good, but the effect on the credit rating is very bad.
What are the consumer tax implications from charge off?
The charge off is the declaration by a creditor that an amount of debt is unlikely to be collected. The implication that it increases the consumer tax.
What is difference between a charged off debt and written off debt?
In most cases there is none. Charge off and written off are terms that indicate the debt is being removed from normal account action and sent to collections. Only when a debt is "forgiven" by the original lender or collector is it considered no longer collectible.
You owe Americredit for a car you returned can they charge some of that debt off?
They can charge off all of that debt, but it in no way remediates your repsonsibility to pay. All "charging off" a debt means is that it has been removed from the lender's active books. Charge off does not forgive the debt, only bankruptcy can do that.
What is internal charge off?
A bank or a loan company can "charge off" a small amount of debt to get the amount off their books. However, this will affect a person's credit report. And it does not mean the person does not have to pay the debt. A debtor should still work to pay off the charge off, to clear the debt and save their credit rating.
Can a collection agency sue for a 'charged off' debt?
Yes, the term "charge off" does not render the debt invalid or uncollectible.
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 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.
What is a Charge-off in a credit report?
A charged off account is similar to a collection on your credit report. The creditor has written off the debt owed and closed the account. The debt is still valid though and can be collected on. The charge off will lower your credit score unless removed. You can dispute a charge off and this give the credit bureaus 30 days to verify the charge off or it must be removed from your credit report.
Can a credit card company still continue to charge interest if the debt has been charged off?
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.
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.
What is a charge off bank?
I've never heard of a "charge off bank" but I do know that a charge off account at a bank is where they bank has listed a loan as "uncollectable" and is probably reporting it to the credit bureau as a charge off or "bad debt". Hope this helps
Can a debt be listed on your credit report by the collection agency as two separate entries with one as a charge off and the other as a collection fee?
Yes, the charge off is entered by the original creditor, and the collection fee is a separate debt.
What does a 0 balance charge off mean?
A 0 balance charge off means that the debt company has given up trying to collect the debt. It may sound good, but the effect on the credit rating is very bad.
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.
