Can a creditor sue you after they have charged-off the debt?

Question

Creditor charged-off debt, then sent it to a collection agency. Then the debtor was sued by the original creditor but the Complaint cites a period of time when the collection agency had the debt.

Answer 1

Yes. Charging off is just an accounting term, and most companies do this after a certain period of no payment. This does not make the debt disappear. You still owe the debt, so they can sue until the statute of limitations runs out in your state.

Answer 2

The debtor is always responsible for the debt. The creditor is always allowed and responsible to collect the debt. For tax purposes, the creditor charges off the debt for that year. The collection agency tries to collect the debt. That having failed, the creditor got the account back, renewed the claim and went after the debtor. If and when the creditor collects the debt, it will have to be accounted for on his taxes for that year. This is basic contract law. The creditor has the rights and must pursue them or else go out of business.

Answer 3

I think the only true charge off happens in bankruptcy. Even at that point if the person who filed for the Bankruptcy make payment arrangements with a creditor then the creditor can still try to collect. Hope it helps?

Answer 4

Yes, they can sue for a valid debt, regardless of what in-house department or external contractor was working on collecting the debt.

How they decided to manage the debt on their internal books - ie: charge off - has no bearing on the original amount owed.

Answer 5

If it's been charged off the debtor is no longer liable for the money and no legal action can be taken.

Answer 6

It's rotten but they are within their rights because even though they sold the debt, it still wasn't paid. Sorry man.