Is a debtor still responsible for an unsecured credit card debt if the creditor charges off the debt in CA?

Answer 1

Charging off a debt is a matter of bookkeeping. They will move it over to the debit side of their books as a loss.

Even if it is charged off they can legally continue to try to collect, either by continuing to collect themselves or by assigning/selling it to a collection agency.

Unless you are past the collecting SOL, you are not "off the hook".

If you are past the collecting SOL then either the original creditor or collector can continue to try to collect but legally cannot sue. If they do file suit it would be up to you to claim affirmative defense of SOL with your answer.

If you are still within the collecting SOL then either the original creditor or collector can legally sue.

If the original creditor "sells" the account to a collection agency, then the original creditor must show a zero balance.
The collector that holds the account has a legal right to place it on your reports as long as it is still within the 7 years from the default with the original creditor.

Both the original creditor and collector must report the account accurately. If they fail to then you have a legal right to dispute it with the CRA's. If they fail to correct it or delete then you can hold them liable for the FCRA violations they have committed.

Answer 2

Yes....a charge-off is simply an accounting procedure....The original creditor (or collection agency) can attempt to collect on this debt regardless of charge-off status

IMPORTANT FACTOR: If this debt is past the Statue of Limitations for your state, you can no longer be sued for this debt. This is a very important factor. Once this time period has passed, you can send a collection agency what is known as a "Cease Communications" letter and they are required by the Fair Debt Collection Act to stop calling you.

Answer 3

If the debt is charged off then technically you are but the credit company isn't pursuing it. It is easier to charge off the debt than to try and collect on it. This works with small debts, but your going to have to deal with the slam to your credit report!

Look at my website and read it all, but especially the "how credit scoring works" section too. I think a lot of your questions will be answered here.

Answer 4

No - if the debt is charged off, you're off the hook EXCEPT that you now are on the hook for the IRS, since that forgiven interest is considered to be income to you.

yup, can't win for losing, and this part of the "forgive your debt" isn't well advertised.

Answer 5

www,creditinfocenter.com