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What does "Charged off as a bad debt" mean

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    #1

    What does "Charged off as a bad debt" mean

    Hi...thanks for the information.

    I filed a Chapter 7 for a total of $17,000 in debt and will still have a $22,000 student loan. One of my cc companies sent me a letter that reads," Because default is evident, your account is being charged off as a bad debt. Therefore, your full balance is due and payment immediately."

    The amount is $6200 and started me to thinking. If my court meeting is on Mar 3, is this company (you know them from sponsoring the college football bowl system..."what's in your wallet") saying that they are giving up before the BK and does that mean I have the option of saying, I can handle $11,000 because the other two cc companies (one an understanding credit union) are not sweating me that hard during my unemployment.

    The credit union ($7,000) told me that I could leave them out of the BK and continue to service the debt and have saving, checking and plastic with them..

    What do you guys think
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    #2
    Even if the credit card company charges off your debt, they can still take legal action against you. They usually turn it over to an attorney who will pursue the matter. The attorney does get paid a percentage of the amounts they collect.

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      #3
      Charge off is simply internal accounting. It basically means they have closed the account. However, lmatherly is right, they can still collect the balance owed. Odds are they have turned it over to a collection agency or sold the debt to a debt purchaser who will try to collect it.

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        #4
        Originally posted by Sly
        The credit union ($7,000) told me that I could leave them out of the BK and continue to service the debt and have saving, checking and plastic with them..

        What do you guys think
        Well there's a right way and wrong way of going about this. Have you been current on this debt? What are the terms of this debt? Can you pay it off in under five years?
        The information provided is not, and should not be considered legal advice. All information provided is only informational and should be verified by a law practioner whenever possible. When confronted with legal issues contact an experienced attorney in your state who specializes in the area of law most directly called into question by your particular situation.

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          #5
          I did that, I highly recommend maintaining your CU account if they maitain your priviledges.
          "You once asked me for advice. You want some now? Never pass up a good thing." Lieutenant Jean Rasczak, Starship Troopers

          Join the Mobile Infantry and save the world. Service guarantees citizenship.

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            #6
            I see now...the charge off is just the first part before the collection goons buy the account and start....I will likely let the BK continue as planned but consider removing the CU account if I find new work soon.

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