Legal Question in Credit and Debt Law in North Carolina

Yes, that is true, although I don't know who "they" are or why you are getting legal advice from "them." If its a collection agency, they do have an incentive to lie to get you to pay, but they are being truthful here.

A charge-off is just an accounting term - it means a debt has gone from the account receivable side of the ledger to bad debt status. It does not mean that you don't owe the debt or that the creditor - be it orginal creditor or junk debt buyer - cannot collect.

There is no way to get this totally removed (unless it was put there in error). Derogatory information, if correct, stays on the report for 7 years. The only way to get this removed is to resolve the debt in some way and turn the charge off into a paid in full or settled for less than the value of the debt, unless you file bankruptcy.

However, what you do is up to you and depends on your circumstances. I think credit reports in general are way over-hyped unless: (1) you are trying to apply for credit - like a mortgage or a car loan; (2) you rent and are applying for a new apartment and the landlord is doing a credit report check or (3) you are applying for a job and the employer is doing a background check. If none of these situations applies to you, I am not sure why a credit report matters unless you have an existing credit card or personal loan with a credit union and there is a cross-default clause.

If you are trying to get or refi a mortgage, what hurts you is not so much the charge-off but the fact that the debt is unpaid. If the debt is paid, your report should reflect that. Of course, lenders are free to set their own guidelines and it depends on when the charge-off occurred. If more recent, it may affect your credit score more.

For the latter situations, it depends on the circumstances, but if explained properly it may not affect you getting an apartment or a job. But it again depends on the circumstances which you don't relate in this post.

If there is a cross-default clause, then this may be problem. You need to have the documents evaluated by an attorney in that case to see what can be done to resolve the issue.