What are charge-offs as indicated on one's credit report?

A charge off is an expression that essentially means nothing other than the you haven't paid the debt for a long time. It has no legal affect on the right of the creditor to collect this debt. It may be nearly impossible to remove this information from a credit report & this debt should be included in any bankruptcy.

Charge-offs are just bookkeeping entries, where the holder of the debt removes the claim from its receivable accounts. In many cases, the claims are sold to third-party debt collectors for pennies on the dollar, and those collectors may still come after you. Generally, any negative credit notes are removed after the required time - 7 years for most of them, 10 years for a Chapter 7 bankruptcy filing. If your credit is in the tank, however, a bankruptcy filing may result in an improvement in your score after a year or so, because the "ding" on your score from the bankruptcy supersedes the other negatives. Before deciding on a bankruptcy, though, you should consult with an experienced bankruptcy attorney to get a full understanding of the process.

Just because a debt is charged off does not mean you will not be sued by a debt collector. Watch the statute of limitations for the state where you live.

You can contact the creditor and see if they will remove the item if you pay it off. The item should be removed after the date indicated. You should file a bankruptcy if the creditors are harassing you or if you have too much debt to pay off based on your current income.

A charge-off is an accounting entry that must be used by most large businesses. The Internal Revenue Service generally requires accrual basis tax accounting for larger businesses. What this means is that a lender books the right to receive money as income when the money is lent. The lender must then pay taxes on the money as if it had actually received the money. When a debt is written off, the lender can offset or deduct from money it still believes it will receive and not pay taxes on money it still expects to receive. This allows the lender to reduce its tax liability. A write-off has nothing to do with your liability to the lender or to some subsequent purchaser of the debt. You need to meet with an attorney who can advise you regarding whether bankruptcy or simply waiting it out will work best for you. One of the problems that you may encounter is being sued on old debt. I have seen creditors sue on debt that is no longer on your credit report. If you do not defend such a lawsuit, a judgment will be entered and you would have additional or new credit damage and may have to pay the debt. As you can see, there is no one right answer. Neither your attorney or I can know for sure if a creditor will come after you years later.

Charge offs are just an accounting mechanism and have no affect on the underlying debt that you owe. If you want to figure out if bk is right for you, many of us give free consultations, just pick up the telephone and come in.

Charge offs mean that the original creditor has stopped trying to collect on the debt. It does not mean that you no longer owe the money, nor does it mean that you are safe from collection. Most of the time charged off accounts have been either sold or assigned to collection agencies for further action. It sounds as though a consultation with a bankruptcy attorney may be beneficial. Most will offer an initial consult at no cost.

A "charge-off" is an account as to which the creditor gave up on trying to collect itself and charged off for tax and/or accounting purposes. It does not mean that the debtor no longer owes the debt. When you have a charge-off, other relevant questions are whether the statute of limitations for the creditor to collect it has expired and whether it has been more than seven (7) years since the account was reported adversely on a credit report and no more payments were made. If the statute of limitations (usually 4 years for written contracts in California) has expired, you may be able to defend against a lawsuit to collect it by asserting the defense (called an "affirmative defense") that the statute of limitations has expired and the case should be dismissed. If more than seven years have passed since the debt was first reported adversely and you have not made any payments, credit bureaus are not supposed to report it any more and you can ask the credit bureaus that they stop reporting it. The foregoing notwithstanding, creditors get around the age of the debt by suing the debtor, who usually does not respond, and thereby winning the lawsuit by default, which turns the debt into a judgment which can be collected for 10-20 years, depending on whether the creditor renews it. If a debtor does respond, it usually has to spend substantially more money defending each such "charged'off" debt than reputable attorneys charge for most Chapter 7 bankruptcy cases. In sum, while old debts may be referred to as "charge-offs", it does not mean (1) that the creditor or whoever the creditor sells the debt to will not continue trying to collect; or, (2) that the credit bureaus will stop reporting it in some incarnation or another, which will continue to lower your credit score.