Why debt may be charged off
If a Florida resident doesn’t make credit card or other debt payments in a significant amount of time, it may be marked as charged-off on a credit report. This means that a creditor has decided to write it off as a loss, and the creditor may sell it to a debt buyer or some other third party. Although a debt may be charged or written off, the debtor may still be legally required to pay it back.
Debtors may choose to settle the debt with a creditor or whoever happens to own the debt. It is also possible to wait until the statute of limitations to collect the debt expires. Generally, creditors will wait 180 days before determining that a debtor is unlikely to pay their debt. In some cases, 120 days is the threshold before which this will happen. Debtors may be sent letters or other notices in an effort to get them to make payments.
If an account is listed as having been written off, it could have negative consequences for a credit report. This event may be listed on a credit report in addition to the late payments that caused it to happen. Like any other piece of credit information about a person, a charge-off will remain visible for seven years from the date it occurs.
Individuals who are struggling to remain current on their debts may benefit by filing for bankruptcy. This may make it possible to retain property while also seeking relief from creditors. Creditors generally cannot take actions to sue a debtor or repossess property while a bankruptcy case is ongoing. This may provide an individual with the chance to renegotiate the terms of a loan.