Hi
Creditors report charged off debt to the bureaus. This makes life of the consumers difficult while looking for new credit in the future. The negative remark entered in the file will stay for 7 years from the date the account turned delinquent.
If a debt is charged off, it does not signify that you are not legally obligated to pay it. The principal amount will still keep multiplying with all the interests and penalties. You will have to look into the SOL period of the original loan agreement and also the federal law governing collections.
If the charged off debt stays within the SOL period, the lenders get a bit of latitude to charge the interest and penalties. State laws and the type of debt will determine if any legal actions are possible.
If the debt is out of the SOL period, any sort of activity in the account will restart the SOL clock. It might also get effective if an agreement is signed to pay or even admitting in writing that the debt is valid.
If you do not have complete knowledge on the SOL in your state, do some researches before you say anything to the collectors. You can also take some help from the state's information operator. They will help by pointing towards the state agency that can explain this law better.
Remember, if a debt is out of the SOL period, this does not bar the collection activities. They can still continue the collection activities. You need to be completely aware of this civil code.
Regards
Roxette
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