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Do I need to file Bankruptcy If my Debts are Charged Off?

A credit notation by a lender in a credit report that a debt is "charged off" is not a legal determination that the debt is not owed. To the contrary, it is an indication by the lender that the debt is more than one hundred eighty days past the point when it last received payment. The debt is now considered a loss as a receivable and therefore no longer an asset of the lender. From this point in time it may be either sent to a collection agency who will receive a commission or percentage of the money collected on the debt or the lender may also sell the debt to a third party for a certain percentage. For example, a ten percent sale of the amount owed on a $1,000.00 debt would be $100.00. The third party would try to collect for more than the $100.00 that it purchased the debt. Its profit depends on what it ultimately collects on the debt. Typically the third party purchasers were either once collection law firms or are closely associated with collection law firms. They have decided there is more profit on owning the debt than collecting the debt for the lender. A "charged off" account will last seven years from the date it was last due when declared delinquent. If the debt has been purchased a new account is created for the same debt on a credit report. In any event, it is best to stay ahead of the enforcement of this kind of debt as its "charged off" status makes it more likely to be enforced by whoever owns the debt because their profits are dependant upon enforcement through lawsuits, garnishments, levies, etc.

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    Posted by MaryDecember 11, 2015

    "I am overwhelmed by your response to my call, even 10 years after my bankruptcy was discharged. You have more knowledge and expertise than I could have imagined. Because of you, my fears have been put to rest. For that, I'm so very grateful. Thank you many times over. "

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    Posted by ClientOctober 26, 2010

    "... I was extremely impressed with Charles' understanding of the bankruptcy laws to the extent that I felt certain that my best interests were always at the forefront. "

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    Posted by MarleneJanuary 8, 2014

    He helped me thru my 1st bankruptcy and now the second. I had no idea what to expect , but they kept me informed and answered all my questions. Mr. Schneider is the most experienced and knowledgeable lawyer I have ever met. If you have to file call this attorney first!

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