No. the act of doing a charge-off is totally supplemental to activity on the account. A charge-off is an internal bookeeping measure taken by the creditor.
It does not reduce your debt or alter the ability to post new delinquencies. It does not excuse any debt, and does not require that the debt thereafter report as $0.
When a creditor does a charge-off, they report the original balanced COd. What then happens to the balance depends upon what actions they take.
They can choose to retain ownership of the debt. In that event, they can choose to continue their own collection of the debt, or they can assign it to a debt collector. If they assign it to a debt collector, the amount of the debt owed still belongs to the OC, and they will continue to report that balance on their account. The debt collector can then report the collection, and also report the same balance as their collection authorization.
If the OC subsequently sells the debt, which is common after a charge-off, they no longer own the debt, so accordingly update the debt balance to $0 on their OC account. That has nothing to do with the debt itself, which still remains unpaid. When an OC reports a $0 balance on their account and debt is still owed, that is strong indication that they have sold the debt.
The new owner can report to the CRA. If it was a debt collector who previsouly did not own the debt, but was merely reporting their collection amount, then the amount they are reporting becomes the amount that they are both collecting and now own. It looks the same on your CR, but who you can then pay changes.
