Junk debt buyers...please take time to read, will help you

Doesn't it seem illegal for a company to sell a debt they've written off? If I understand correctly, when you write off the loss you avoid paying taxes of that amount. So, I could write off the $10,000 that is owed to my medium sized business on a number of delinquent accounts and use that $10,000 as a deduction on my taxes. THEN, I could sell that debt to others? Isn't that wrong? Doesn't that seem like a tax scheme? This means the government is not only footing the bill for the debt by way of tax deduction, but when the next company can't collect they can write it off, too? ... even though they're going to sell it again?

I think a charge off or write off is different from a tax write off. A tax write off requires the company to file a 1099-c and the consumer would have been made aware of that at tax time. Once they do this, the debt is considered forgiven (you had to pay taxes on it as in come).

Charged off or written off as it pertains to credit reports I think is just internal bookkeeping. They have just decided the amount was a total loss. These accounts get bundled together and either go to in house collections, outsourced collections, a lawyer, or sold off with the older the accounts, the cheaper it gets.

You are right, chargeoff an writeoff are 2 different things. Chargeoff happens when a company doesn't believe, or are required by law, that they are able to bring account current within a time frame. By law the time frame for chargeoff is max 180 days on CC debt at least. Once the clicks, the account is taking from current recievables and transferred to current collections. Depending on the basis of accounting, in accrual taxes are paid that period, in cash taxes aren't paid until closed. If the account isn't collected, the loss goes in for the period the account is sold. When a debt buyer purchases the account, they are purchasing a recievable. What that means, is they are expecting to collect 100%, similar to buying a bond that should pay you at maturity twice what you spent. So if no payment is received it is in fact a loss for you, and losses are free to be claimed on taxes. Writeoff happens when you dismiss the debt as fully uncollectable, that's where 1099c comes in. From what I know you can't sell past 1099c.