Creditors "Charged Off" Credit Account
REM # F633
By Ilyce R. Glink
Summary: A reader wonders what it means when a creditor put "charged off" on his credit account. Ilyce explains how debt is sold to credit agencies.
Q: What does it mean if creditors put “charged off” on your credit
account?
How long will it appear on your credit history? Does it mean they turn you over to a collection agency?
A When a creditor puts a "charge off" on your credit report, it means
the creditor no longer believes you will pay the bill and has written the debt
off of its books. Often, they then sell your debt to a collection agency that
pays pennies on the dollar for the right to try and collect your debt.
The collection agency will then come after you to pay up. They will hound you
until you agree to pay what they say you owe. While it is legal for them to
pursue you, they have to live within the rules of the Fair Debt Collection Act.
For more information on the Fair Debt Collection Act, go to the Federal Trade
Commission's website, ftc.gov, or log onto
http://www.ftc.gov/cp/conline/pubs/credit/fdc.htm
for an easy-to-understand Q&A about legal debt collection practices.
NOTE: This column is distributed by Real Estate Matters Syndicate, PO Box 366, Glencoe, Illinois, 60022. This column may not be resold, reprinted, resyndicated or redistributed without written permission from the publisher.
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