Legal Question in Credit and Debt Law in California
Is money owed after a charge off?
I had a credit card with a balance over $10,000. I could no longer afford the payments, and the account went to collections. The original creditor charged the account off, which is clearly stated on my credit report. This happened approximately a year ago. Now this account was apparently sold to a second and then a third party collection agency, but the account was never reported by anyone as a collection on my credit report. I received a letter from an attorney's office this past week threatening to collect on the account. Do they have the legal right to do this, even though the original creditor has completely charged off the account and is not pursuing collections themselves? Do I have an obligation to repay this charged off debt?
3 Answers from Attorneys
Re: Is money owed after a charge off?
A charge-off simply means the creditor has written off the debt as a bad debt on its books. They have 4 years from the date of your last payment to sue you.
Re: Is money owed after a charge off?
The original creditor can sell the debt or assign it to a collection agency. If the law firm has as valid assignment, they can collect the money from you. The charge off is irrelevant.
Re: Is money owed after a charge off?
Yes, they do. Unfortunately, a third party assignee or a debt purchaser would simply "step in the shoes" of the original creditor, even if the debt has been charged off. A charge off merely means the original creditor can no longer show the debt owed as an asset on their balance sheets, but that does not discharge the debt per se. However, we may be of great legal assistance in settling this matter on your behalf, as we have helped over 400 clients in 2005 alone in similar positions as yourself. For a free phone consultation, contact us directly today.