Legal Question in Credit and Debt Law in Texas

Re: Charge Offs

As long as payments are made on debts, they are an asset to the lending company. A charge off is a management decision to remove a debt which is not being paid from the asset column. As long as the statute of limitations has not expired, the company can file a lawsuit to collect the debt. When was your debt made? Call me at 1-877320-5232.

Re: Charge Offs

There is a huge difference between a charge off and forgiveness. From the debtor's (your) point of view, the debt you owe is a negative: you owe the creditor. From the creditor's point of view, the debt you owe it is a positive: it expects to receive money. A "charge off" means that the creditor does not believe that you will pay the money, so it is recognizing that fact in its internal accounting.

Have you ever loaned a friend money, but the friend did not repay? When you said to yourself "I don't expect him/her to pay me back," you were doing a charge off as a creditor. If you THEN said to your friend "You don't HAVE to pay me back," then you have foregiven the debt. If you said to your friend "I don't expect you will ever pay me, but I am NOT forgiving your debt," you would be placing your friend in the same position in which your creditor has placed you. You could sue your friend and get a judgment, you could sell your friend's debt to someone else, or you could forget about the debt until the time to sue (statute of limitations) had passed to sue.

Hope this helps.