If Ihad an account that was charged off and another company bought it, doI have to pay what they paid for it or whatI owed?

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If Ihad an account that was charged off and another company bought it, doI have to pay what they paid for it or whatI owed?

Asked on August 8, 2011 California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Two different issues:

If the debt was truly charged off, then you should not have to pay anything on it--a debt that is charged off is considered uncollectible and the creditor writes it off as a loss on his/her/its taxes. So the alleged buyer of the debt would not have bought anything IF the debt was actually fully charged off. That said, if it was just that they stopped trying to collect from you--possibly figuring to sell the debt to someone else later--that is not charging the debt off for this purpose. Someone may simply stop trying to collect on a debt without affecting its validity. You would need to, if sued, use the mechanism of discovery to find out precisely what happened with this debt.

If the debt is still valid, you would owe the original amount. Your obligations are not affected by what the buyer paid for it. The buyer makes money  by buying risky debts at a discount but collecting them for (hopefully) face value--your debt is determined by the money your borrowed, or the goods and services you received, not what someone is willing to by that debt for.


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