Legal Question in Credit and Debt Law in California

Re: Credit Issues

Thanks for your posting. As Ken stated, a charge off is always negotiable, and just means that they are no longer seeking collection on the debt, and have taken a tax deduction on the debt. You can negotiate by paying the amount, however, and as part of negotiating, you should get a written promise by the creditor to clear the negative information (i.e., the charge off) from your credit record.

A bankruptcy is much different, in that it truly wipes the debt clean, and the creditor cannot legally collect on the debt after a bankruptcy has gone through.

Re: Credit Issues

A bankruptcy is where you are relieved from paynig your debts by a U.S. Bankruptcy Court. Creditors are bound by that judgment, and cannot enforce collection.

A charge off is a voluntary action by a creditor, which allows them to write the debt off on their tax return. They can still attempt to collect the debt.

If you contact them, it is likely that they might be willing to settle for a partial payment. Depending on the age of the obligation, they may be barred by the statute of limitation from bringing suit against you.