What are the implications of being “charged off” in an unpaid credit card debit.

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What are the implications of being “charged off” in an unpaid credit card debit.

Is it better to wait for a credit account debt to be charged off before negotiating a settlement? When does your account get to a collector and what is the best defence for negotiating a settlement when your case get to court?

Asked on April 25, 2012 under Bankruptcy Law, California

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Typically, when an account held by a creditor is "charged off" the account is written off from the creditor's accounts receivables and is then sold to a third party debt collection agency.

The issue is when did you make the last payment on this "charged off" account? If it has been more than four (4) years plus, then there is a good chance under your state's statute of limitations for breach of contract or common counts causes of action that the statute of limitations against you for payment on such an account has run and is time barred.

Your best defense for negotiating a settlement could be the defense of the statute of limitations depending upon how old the account is and when the last payment was made.


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