Legal Question in Consumer Law in New Jersey
charge off question
If a company charges off a debt, can they sell the debt to a collection company? I ask because it is my understanding that once they charge off the debt, they get credit on their taxes as a loss. Therefore, to sell the debt means they get paid twice. Please assist me.
Asked on 6/09/07, 11:01 am
1 Answer from Attorneys
John Corbett
Corbett Law Firm LLC
Re: charge off question
That is for the accountants. If the debt is charged off as a bad debt, any amount collected becomes taxable as current income. None of that affects the claim.
Answered on 6/09/07, 10:10 pm
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