What exactly does charge-off mean?

[Anonymous]

What exactly does charge-off mean? And what are its consequences?

[Anonymous]

Charge off is an accounting term. It's debt the OC usually believes isn't worth spending time and lawyers on to collect. Charge offs can sting your credit almost as hard as a BK. You can buy a car with COs, but you won't get into a home on a prime loan without paying them.

If you have a CO, check the SOL for your state. The debt is likely still with the OC. Try offering them a PFD if the debt is yours. If not, dispute it with the CRAs.

If you're thinking about buying a home or car, do NOT tell the OC that. Sharks smell blood.

[Anonymous]

I have had a charge off by a credit union some time ago. I have been back on the radar (I guess) due to me getting a fairly new cc and my g/f and I renting a new place together. I did the "free" credit report thing and it is showing up again as a charge off (even shows the CO date of 07/31/2002).

I just got a call today from a random number asking for me and saying that I was in delinquency of the loan.

First, shouldn't the CO be dead, ie not being reported again?
Second, how can the C.U. charge it off (assuming they've taken the write off) and now have someone wanting to collect on that?

[Anonymous]

That's a good question. Can they C/O it and sell it to collection? It's not exactly C/O if sold. It would be transfered to recovery. Hmm. I don't know. Maybe someone else can answer.

[Anonymous]

Yes, a CO can be sold and almost always are.  Then can then show up as a collection and even eventually as a judgement impacting your score on 3 occasions.  Best to avoid them.  As far as mortgages, none in 2 years to be safe for FHA.

ALso, once it is a charge off, the original accoutn balance should show 0 as it has been charged off and sold.

[Anonymous]

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mickie08 wrote:

Yes, a CO can be sold and almost always are.  Then can then show up as a collection and even eventually as a judgement impacting your score on 3 occasions.  Best to avoid them.  As far as mortgages, none in 2 years to be safe for FHA.

ALso, once it is a charge off, the original accoutn balance should show 0 as it has been charged off and sold.

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It can be charged off and still show a balance.

If sold, the OC can't show a balance.

Charge off doesn't mean you don't owe it, it just means they have determined that the chances of them collecting are near zero, so they have moved the account from profits/revenues to losses for tax purposes. It really has nothing to do with us consumers, it is more for accounting.

Yes, they can CO an account and still sell it.

[Anonymous]

The OC and CA can report for 7 years past DOFD.

The CO date is important- the DOFD is even more important.

[Anonymous]

So, 7/31/09 it should drop off my report?

I got a call from someone from a credit company asking for me but I didn't give them any information. If I don't speak with them, will I be "OK" to finish waiting it out?