The fact that a creditor has charged delinquent debt to profit and loss is basically an internal accounting measure (and often a regulatory requirment) that does not relieve the consumer of continued obligation for the entire debt, and does not prevent continued attempts to collect on the debt or to report continued delinquency.
As such, the fact that a CO has been taken and reported does not otherwise affect the obligation for the full debt, and the continued accrual of delinquencies.
Many creditors will discontinue the reporting of additional monthly delinquencies after reporting a CO, but are normally not precluded from doing so.
Once taken, a CO remains in the consumer's credit file, even if the debt is subsequently paid, and is scored as a major derog.
Removal of a CO occurs only by reporting of deletion by the creditor, or by exclusion from your credit report no later than 7 years plus 180 days from the DOFD.
The exclusion of a CO is not re-aged by any other actions, such as payment or non-payment, and has a date-certain based ONLY on the DOFD. See FCRA 605(c).
Paying does not result in deletion. Yes, you can negotiate a pay for deletion of a reported charge-off, but acceptance is discretionary on the part of the creditor, and usually hard to obtain in view of the published credit reporting policy of the CRAs, which instructs creditors not to delete based on payment of the debt.
The CRA policy is a business policy intended to preserve the completeness and thus saleability of their product, credit reports.
