Charge-offs are their own distinct breed of reported OC derog. They are not pegged to one date of delinquency on the consumer's part, but rather on the internal bookeeping actions of the creditor. The prerequiste for any business charge off is the existence of a delinquent debt. It is hard to dispute a charge-off if the account was, in fact, delinquent at the time the charge-off was done. Creditors must hold the debt to be "uncollectible" in order to take advantage of the tax benefits afforded by the IRS, and thus shift the amount from an asset (account receivable) over to a liability (uncolletible debt). But that is all internal within the operations of the OC and their accounting of tax liability with the IRS. The charge-off is not actually the reporting itself to the CRA, but rather a reporting to the CRA of an action they have already taken.
A charge-off is thus not debt in and of itself. The debt is the same as far as the consumer's liability to pay, and the creditor's ability to report the debt to your CR, regardless of whether the OC has done an internal charge-off. . You can pay the amount of the debt that was charged-off, but that does not "pay off " the holding of the CO itself.
The only way to substantively dispute the reporting of a CO is to show that the taking of the CO by the OC was improper in and of itself, and thus the reproting of a CO to the CRA was inaccurate.. A very difficult thing to do. The only clear way to do that is to show that, at the time the OC did a charge-off of the debt, the debt was not delinquent.
Most attempts to remove a CO must thus rely on the good-will of the OC. A PFD is basically an offer to pay the debt in exchange for their good-will deletion of the CO from your CR. It is possible, but solely at the discretion of the OC.
Once the debt is paid, there is no longer any payment to offer, so a PFD offer would not be apprropriate.
