[Mary]

I have a few accounts that are "charged off" and I regret to say that I don't have a clue what this really means. These were joint accounts with my ex boyfriend that I never even used...sucks to be me Can somebody please explain what that means and how it affects the order in which I pay items off (what I mean is, are these charged off accounts a more pressing matter than my medical bills which I can afford to pay right now?)

Thanks once again...you guys and gals are really clearing things up for me and helping me out of the fog!

~Mary

[imkimssister]

Hi Mary!
The definition of a charge off---
A debt that is deemed uncollectable and written off. Also known as a bad debt.

Usually this happens after a creditor hasn't received a payment from you in three months. But there are different time tables--depends on the creditor. I should know, I have several that I am currently paying on. So you are not alone!!

Just so you know, the term 'charge off' doesn't mean that you don't have to pay the debt. You still do. It just means the company deemed it as 'uncollectable' and passed it on to a collection agency. You are still responsible in paying this though.

[TMD]

charge off means that the company wrote it off as bad/uncollectable debt and took it at a loss. You are still obligated to pay it though, and will probably recieve correspondence from a CA about it soon. I would pay all your current stuff first though, so you don't get behind on that. Because the charge-off is already on there hurting your score, it would be best to stay current on what you can. Then when you have the chance, go back and pay the charge offs.

How old are your medical bills by the way?

[Mary]

Thanks for the responses, that clears things up a bit.

Some of my medical bills were placed for collection in 2002 and 2003, some were placed in 2005. I have a long way to go.....

[Mary]

Sorry, I should have clarified that last post...

Several of my medical bills are out of the SOL, but they are small enough (some are under $100) that I will soon be able to afford to pay them in one payment. I am putting these as my priority since it will be one less thing for me to worry about. Thanks again guys and gals!

~Mary

[Mary]

Maybe somebody could add this term to the commonly used terms list? I looked for it before I posted, but it wasn't there

can someone clarify for me?
if an OC has charged off on your account, and the debt is now in the hands of a DC (or CA) - and the DC is a law office that has filed a summons against you - the DC "owns" the debt now, not the OC? so how can the DC claim to be "representing" the OC, even going so far as to name the OC as the plaintiff in the summons? isn't that misrepresentation/fraud? if i wanted to present an offer to settle, it would be with the DC, not the OC, right?
thanks for any advice, support, guidance, examples!

[becky.nodebt]

i'd also like to know

so if the debt has been sold to a CA then the account on my credit file should be removed, right???

[DebtCruncher]

1) You are correct that the "plaintiff" would be the current/legal owner of the debt, and the attorney would be representing the plaintiff. However, a creditor is never under any obligation to sell it's accounts just because they charged off. They can keep it in-house and work it in their recovery department, or send it to an attorney for suit. So it is possible that the OC is actually the plaintiff in your case.

2) When a debt is sold, the OC does not have to remove their tradeline from your credit file; they can still report it as a chargeoff. However, in order to report correctly per the FCRA, the OC should report a zero-balance and a comment that the debt was "transferred."

The way that I understand it, if an account is "charged off" that means that the OC took a loss, and received a credit from the IRS.. Thats the definition of bad debt.. And I keep reading that its "illegal" to collect from a debt thats been charged off for this reason.

[DebtCruncher]

and received a credit from the IRS

Lenders don't get credits from the IRS for charged off accounts. Bad debts are just an operating expense, and reduces their overall taxable income. That's all. If a charged off account can be collected on (or sold) after it's charged off, then it becomes a recovery and reported as income in the year it was collected.

And I keep reading that its "illegal" to collect from a debt thats been charged off for this reason.

You can read that all you want, but it's not true. There is no law that prevents anybody from collecting on charged off debts.

My wife has a CC account that was charged off in 2008. She is now being contacted by a law firm to collect. We sent a Debt verification letter and they Replied with just copies of the statements. The last statement balance at charge off was about $2200. less what they are trying to collect. Also, the reply did not have anything showing the agreement from their client to collect the debt. nor the agreement with my wife's signature to promise to pay the debt. Then in their letter reply they show the original creditor as being Bank of America, and she never had a card from BofA. It was PNC Bank.
What should we do at this point.......