What does "Charged Off as Bad debt on your credit report mean?

Question

I have two things on my credit report from two different credit cards. One of them show it as a $0 balance now and the other card still says the amount I owe. I was just wondering what this means.

so is this something I will have to pay on still? Just after reading other questions about this, sounds like regardless if I pay it or not it will be on my credit report for 7 years.

Answer 1

Charge off is a accounting term that simply means that the credit card company does not think you will ever pay them so they are writing it off as a loss.

The bad thing is they will sell it to a collection company and they will come after you and that activity will also show on your credit report.

If the debt is large enough, they can take you to court and get a judgment, at that point they can attach bank accounts, garnish wages (if your State allows it) and file liens on any property you may own like cars, boats, land and homes.

This also will show on your credit report making it very hard to get any other types of credit without making large down payments and paying State maximum interest rates.

And yes weather you pay it or not, it will show on your report for 7-years from the date of first delinquency.

Answer 2

Charged Off As Bad Debt

Answer 3

Yes the credit card company has written this bad debt off or charged it off, but it can still be collected and reported by a collection agency. So, you need to check on that. It would be a good idea to check your credit report first, make a copy go through the whole report with a fine tooth comb. If you can pay off bad debt that is pretty recent, then by all means do so. You can also ask them if you pay the debt, if they would report it as paid as agreed. They may not do it, but it doesn't hurt to ask. Next, start working on the other negative items that are older, you can send dispute letters to the credit bureau for various reason, whichever might work in your situation, to see if they will delete this information from your credit bureau report. Lastly, negative information can legally be removed from your credit bureau report, after 7 years from the date of last activity (meaning the date that you last made a payment on this account). Lastly if you don't have a good credit card, you will have get a positive credit on your credit history, so I suggest you open a secured credit card, to build credit.

Answer 4

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Charge-off is an accounting term -that's all. They move the debt from the performing (paying and current) ledger to the non-performing side (uncollectable) and they get a tax break for wrting off the bad debt. That does NOT mean they can't keep trying to collect on it. Typically they'll sell if off to a collection agency. Derogatory marks stay on your credit report for 7 years +180 days from the date of delinquency that preceeds the charge-off.

Answer 5

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RE:
What does "Charged Off as Bad debt on your credit report mean?
I have two things on my credit report from two different credit cards. One of them show it as a $0 balance now and the other card still says the amount I owe. I was just wondering what this means.

Answer 6

A charge-off is an accounting procedure for tax purposes used by the creditor where an uncollectible debt or charge-off is reported as a loss for the creditor. 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.

Answer 7

What Is A Charge Off

Answer 8

It means the company wrote it off as bad debt and don't expect to receive any payment. They most likely then sell it off to a collection agency.

Answer 9

How do I know my bad debt has been sold off to a collection agency

Answer 10

It means you never ever paid it, and they believe it will never ever be paid either. It will sit there for 7 years staring at you and your credit report as a result of it all too!