If an account in collections has been closed onyour credit report and the status is a charge-off, can the creditorstill come after you for payment?

Asked on December 8, 2011 under Bankruptcy Law, Ohio


M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Actually, yes it can. Many people mistakenly think when a debt has been charged-off that it's been cancelled by the creditor. In other words, they no longer owe the money so they will not be pursued for collection. Unfortunately, that just isn't the case. The fact of the matter is that a charge-off is nothing more than a bookkeeping entry. It has nothing to do with the legal status of the debt. If it is not paid or otherwise settled, you are still liable for it. Basically, the way it works is that a creditor may sell an account on which it is owed money to a third party debt collector. That collector then owns all of the same the rights to pursue action to collect on the debt (i.e. the account) as the original creditor did.   

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