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Charged off?


Fury23
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Hello,

After reviewing my updated credit report, I noticed one of my collections was noted as "Charged Off". What does this mean exactly?

a "charge off" means after x days usually 180 days , the Original Creditor has decided they are not going to try for a collection, FOR THEMSELVES, they "wrote you off" as a bad debt

Then it Usually goes to a Collection Agent they have either been " ASSIGNED"+ given the contract from the OC to collect,

OR SOLD " gave up rights" to your debt, means a JDB now will try to get the money from you. regardless if they paid 1.00 on a 1000.00 debt, they will harrass you for the 1000. or sell to yet another JDB

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a "charge off" means after x days usually 180 days , the Original Creditor has decided they are not going to try for a collection, FOR THEMSELVES, they "wrote you off" as a bad debt

Not quite right. Charge off is an accounting term that means "charge against income for profit and loss purposes". It does NOT mean they've decided anything about what their further collection efforts may be. It does NOT mean the same as "written off". It only means they've moved your account from the "actively paying" account to the "not actively paying" account on their P&L.

They still own it, you still owe it, they can continue to charge interest and penality, and they can still try to collect it...with or without the help of a CA. Depending upon THEIR current financial situation (i.e, do they need to juggle money around to make their balance sheet look better or pay less taxes), they MAY decide to sell it to a Junk Debt Buyer, and at that time it becomes a "write off".

We've had this discussion before. There are some FDIC regulations that suggest an FDIC insured bank should "write off" as uncollectable, debts that are upaid for 180 days...but...we have never been able to determine if that applies to the credit card issuing subsidiaries of banks. IMO, the answer is 'no", because none of the CC banks comply.

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  • 3 weeks later...

okay I'm confused - I read recently that an OC had to do a "charge off" 180 days after the last payment - FDIC rules

According to the article this is to make sure OC's don't pad the debt to get a better write off amount.

Which if this is true - got me to wondering - couldn't those of us whose accounts weren't "charged off" until say 365 days after last payment - argue that OC padded the debt with late fees, over limit fees etc that were not allowed by the FDIC - and thereby force the original creditor to have to go back and correct the default amount to reflect the balance they had at 180 days?

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As I said, the FDIC rules (NOT laws) do say that FDIC insured banks must write off unpaid debts within 180 diays.

It is unclear as to whether this applies to the credit card issuing subsidiary of those banks. Usually, the CC banks may have the same name, but are organized as a separate enitity. They may decide not to accept FDIC insurance (which really insures DEPOSIT accounts) so they don't have to follow their rules.

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  • 1 month later...
Not quite right. Charge off is an accounting term that means "charge against income for profit and loss purposes". It does NOT mean they've decided anything about what their further collection efforts may be. It does NOT mean the same as "written off". It only means they've moved your account from the "actively paying" account to the "not actively paying" account on their P&L.

They still own it, you still owe it, they can continue to charge interest and penality, and they can still try to collect it...with or without the help of a CA. Depending upon THEIR current financial situation (i.e, do they need to juggle money around to make their balance sheet look better or pay less taxes), they MAY decide to sell it to a Junk Debt Buyer, and at that time it becomes a "write off".

We've had this discussion before. There are some FDIC regulations that suggest an FDIC insured bank should "write off" as uncollectable, debts that are upaid for 180 days...but...we have never been able to determine if that applies to the credit card issuing subsidiaries of banks. IMO, the answer is 'no", because none of the CC banks comply.

In regards to your info here, how would you suggest I handle this neg TL.....

(this was a checking acct, neg balance )

AXXXXX Bank

Status: Acct charged off. $XXX written off

Acct History: Charged off as of Jul 2006

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