Do I Still Owe a Charged Off Debt?

Young Worried Woman Calculating Bills At HomeIf you receive a notice that one of your debts has been charged off, don’t start celebrating just yet. Charged off debt often gives borrowers the impression that they no longer owe that amount. However, while the debt does appear to be gone, “charged off debt” is not the same as “discharged debt”.

What Does “Charged Off” Mean?

A debt that has gone unpaid for more than 180 days will typically be charged off, which means that the creditor that holds the debt has taken it off of its accounting books. Since the debt has not been paid in some time, the creditor has no reason to assume that it will ever get paid back, and can therefore not continue to count it as an asset.

However, just because they take it off of their account does not mean that they will not still be coming after you for it. The debt is still owed, and it can still damage your credit the longer it remains unpaid. This means that buying things on credit, such as a car or a house, will become more and more difficult.

What’s the Best Solution to Fixing a Charged Off Debt?

Well, the best solution would be to pay it off. Some creditors will negotiate a deal with you to allow you to pay the debt off in small monthly increments. Some may even reduce the overall balance since it is likely in their best interest, because a reduced amount is still more than they can get if you file for bankruptcy.

If paying the debt off is not something you can do now, filing Chapter 7 bankruptcy may be the best solution. Immediately after filing, you will receive protection from further harassment via the automatic stay. Filing Chapter 7 bankruptcy could also see the charged off debt officially discharged, meaning that it really is gone and you no longer have to worry about it.

Judd Law Firm offers bankruptcy advice and representation throughout the D.C. and Maryland area, including Bethesda, Greenbelt and Silver Spring.



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