What Does Charge Off Mean?

What Does Charge Off Mean?

What Does Charge Off Mean?

When you stop paying on a debt you owe to a lender and the lender feels the debt is not collectible from you, they will "charge off" the debt. This means one of many different things regarding the debt.

If the amount of the debt is small, the lender may have just charged it off and will not pursue the matter any further. In this instance, the lender considers the debt a loss. Though this in unlikely, it will sometimes happen when the charge-off is quite small and when it does not make financial sense for the lender to come after you for the debt.

If a lender cannot collect on a debt, they may give or sell the debt to a collection agency to collect on the balance. On your credit report, it may state that the debt was charged off or transferred to another lender. The collection agency will now own your debt and try to get you to pay on the balance.

If the amount of the charge off is high enough or there is substantial risk to the lender, it may also be turned over to an attorney. The attorney will then act much like a collection agency and try and collect on the bad debt. If the attorney cannot recoup the debt from you, they may try and pursue the matter in court and obtain a judgment against you.

Regardless, the one thing a charged off bad debt does mean is that your credit scores will take a steep dive if there are one or multiple negatives on your file. They will typically stay on your credit report for seven years before they can be removed. These bad debts will also often times be transferred from collection agency to collection agency over the years making them difficult to keep track of.

I removed my charge offs and increased my credit scores by calling Lexington Law. I called 1-800-258-0062 and received a free credit consultation. With in 2 months of signing up my credit scores had improved 180 points!

POST COMMENT

Apollo DT9706P Lenovo Ideacentre Q150 Series 40814AU Desktop How to Cure Denture Discomfort How to Increase Stamina in Bed Naturally? Make A Light Table - Here is Step-1 ! How to Buy a Used Peugeot Expressing the 'Joy Quotient' (JQ) Find Your Perfect Filipina Partner ASUS Eee PC 1015PN-PU17-BK 10.1-Inch Netbook What is Organic Traffic? One Mad Day Ushers In a Better One Why People Cut Themselves 2 Custom Lapel Pins: Send A Message