2006-11-04 13:35:16 · 8 answers · asked by suprahattie 1 in Business & Finance ➔ Credit
Creditors typically write off or charge off a debt if there has been no payment on the account for more than 180 days or six months. This does not, however, mean that the person no longer owes the debt. A charge-off is an accounting procedure for tax purposes used by the creditor where an uncollectable debt or charge-off is reported as a loss for the creditor.
The creditor can and often does attempt to collect the debt long after it has been charged off with either an in-house collection program or more commonly with a third-party debt collection service. Because the original contract for the debt, was not honored, the account balance can be requested paid in full. Sometimes a creditor will accept a partial payment of the debt and the account will be reported as "settled charge-off."
2006-11-04 13:39:08 · answer #1 · answered by ~brigit~ 5 · 1⤊ 0⤋
Usually the creditor has written it off as bad debt. Debt that either has been turned over to a collection agency, sold off at a reduced price on the dollar, and/or they figure that they will not get back.
There is only so long that over due debt is kept on their books, depending on the industry, acct'ing laws & regulations, etc. This information will stay on your credit report just as any other derogatory information will which is 7 to 10 years.
2006-11-04 13:40:27 · answer #2 · answered by Margaret K 3 · 0⤊ 0⤋
It means that the person did not pay their debt, and the other party that was owed money "charged off" the debt, because they felt that they were never going to be paid. It's one last shot that someone whos owed money can take, in the hopes that someday, they'll want to clear this black mark off of their credit report.
2006-11-04 13:39:33 · answer #3 · answered by RepoMan18 4 · 0⤊ 0⤋
It surely means that she did not pay on it and it became charged off by technique of the organization yet that you nonetheless do owe it. undesirable mark on her credit document. those cost offs live to inform the tale her document for as a lot as ten years i believe or it could be 7. maximum in all chance, those mastercard organizations have already grew to change into those charges over to a chain organization which will also go on the credit document.
2016-11-28 19:08:15 · answer #4 · answered by Anonymous · 0⤊ 0⤋
It's a huge negative impact to your score. It means the creditor did not believe you would ever pay and charge off the debt (closed the account without you paying).
2006-11-05 05:02:23 · answer #5 · answered by Mariposa 7 · 0⤊ 0⤋
Brigit pretty much nailed it. Thats the correct answer but I would also like to add.
If you owed xxx card say,$1000 and they take it to a charge off and report it as a lost to the IRS. You may also get a tax bill from the IRS for taxes owed on a $1000 income. This may or maynot happen, just depends on if they report it to the IRS or not.
Don't ask me how I know! wink wink!!
2006-11-04 14:59:21 · answer #6 · answered by damhoss 1 · 0⤊ 0⤋
It means the company you borrowed from wrote it off as a bad debt.
2006-11-04 13:38:50 · answer #7 · answered by huffmak2 2 · 0⤊ 0⤋
It means other lenders or creditors look as you as a deadbeat
2006-11-04 14:38:21 · answer #8 · answered by barbara w 2 · 0⤊ 0⤋