Legal Question in Credit and Debt Law in California

Yes. The charge-off is an accounting and tax matter allowing the creditor to deduct the business loss. If they subsequently recover on the debt or sell it to a collection company, they recognize that as income, rather than a non-taxable collection which it would have been before the charge-off. It has nothing to do with your liability for the debt, which continues for at least four years from when you first missed a payment.