what is charge off?

Answer 1

A charge off is when you haven't paid one of your credit grantors what you owe. The debt must be seriously delinquent. They then decide that the debt is uncollectable so they charge it off their books. Each company has their own way of doing things so the order of what happens next may change depending on whom you owe the money to.

The company may decide to sell the debt to a collection agency to try to collect the debt. Most companies will try this before charging off the debt, but not all.

The company may decide to use the loss as a tax write off. This is a very common practice amongst most companies. If they do this, they are no longer legally entitled to the debt. However, there is little to no oversite on how this is handled so the company may still try to collect. You will have no way of knowing if they have written off the debt as a tax loss because they are under no obligation to tell you.

The company may decide to make a claim against their insurance. As above, they no longer have a legal claim to your debt at this point. See the paragraph above.

If this goes on your credit record, the credit reporting agencies are allowed to report it for up to 7 years, though they are not obligated to report it. In fact, they don't have to report anything on you for any amount of time. The only reason they do is to make money off of your name, literally.

The good news is that if you do have this information on your credit report, you can have it removed. There are ways to do this and it is 100% legal to do so. There are those out there who will try to get you to believe that it can't be done or that it is not legal. This is what the lending institutions want you to believe. If you know that you have the power to control what is and isn't reported on your credit file, they wouldn't be able to force you to pay higher interest rates. As with just about everything in America, it is all about the money.

If you do decide to have negative information removed from your credit file, let a professional do it. You can try one of those do-it-yourself kits you can purchase off the 'net. That is like trying to repair your car with nothing more than a Car Repair for Dummies book. You may have limited success, but if you want it done right go to a mechanic.

There are ONLY THREE legitimate credit restoration companies currently in the United States. If you want to know if the one you are considering using is legit or not, read the article in my blog.

Good luck to you.

Answer 2

As the term charge-off includes the term charge, many people think term means cancellation of the account by the creditor. This means you cannot pay for anything with your credit card. But it not what the banks mean. According to banks and bill collectors, a "charge-off" is the point at which the creditor writes off the outstanding debt as a "bad debt." This normally occurs after 6 consecutive months of non-payment. From this point onwards, they do not consider your debt in their books as an asset. As you still owe the money, the creditor will continue their efforts to recover it from you. But the rules of accounting force the creditor to nullify your debt in their accounting books. To compensate for this loss, they penalize you by putting a negative remark on your credit report. A "charge-off" is a harmful negative mark, but it is not the financial disaster that your creditor would want you to believe.

Answer 3

A charge off is when a company with which you have debt with writes that debt off as a loss. This will have to be satisfied when you go to purchase a home or refinance unless it is over 24 months old.

Answer 4

It's when you don't pay for something you purchased on credit,if you don't make a payment within 3 months,they(your creditor)will"charge it off"their account.Then you will have what is known as an I 9 on your credit report.which will stay on there for 7 years.You don't want that,it will keep you from buying anything else on a credit for 7 years.Peace!!

Answer 5

if you stop paying on an account, the company charges it off. It gets the account off of their books that way but they will still try to collect on it. Bad thing to see on your credit report.

Answer 6

It could mean any one of a number of things. It could mean that an electrical charge was turned off (as opposed to charge on, which would mean the unit was hot). It could have to do with credit charges. It could mean simply running into action. You really need to provide a little more information.