Charge Off and Late Fees

Yep, they can if her contract has that stipulation.

Charging off a debt is an internal business measure taken by a creditor, and other than their ability to report that action to a CRA, is really their internal business. It does not "charge-off" the debt vis-a-vis the consumer, but only shifts the debt their internal bookeeping from a collectible asset to an uncollectible liability. It is unpaid debt.
Collections or other actions taken to recover the debt likewise dont terminate the fact that credit was extended and, while remaining unpaid, can continue to accrue interest under agreed terms of the account.

Yes, they can. About 6 months ago my car was reposed. They charged me $350 for having some asshole take my car while I was AT WORK. Than they charged me $150 to get my car back, plus every day it sat at a secured location they charged me $25 a day. They always repose on a Friday usually, because most banks and businesses are closed on weekends...they want to make that extra money while you wait till Monday. Well I ended up paying the remaining balance off which was about $1800 PLUS $550 to get my car back. So in the long run, it's on my credit reports for another 6 1/2 years and I made the banks richer.

Only advice I can say is, well tell your friend to collect as much cash as possible OR borrow cash from the right people. The bank WILL want the remaining balance paid off PLUS fee's paid for. Do this ASAP!