Bad credit is no fun. When you check your credit report and find derogatory entries on your credit report listed as "charged off," you may wonder what this term means, and if you even have to repay these debts since the original creditor is no longer trying to collect from you.
Second question first: Yes, you still owe the debt.
First question: A charge off refers to a particular debt that a creditor has determined to be uncollectable, and has therefore written off the books. Generally this debt ultimately gets sold to a collection agency. They may buy the debt for pennies on the dollar and use every dirty trick in the book to shame you into paying up.
If a creditor hasn't received the payment you owe him after three months, the account is frequently charged off and sold. But sometimes the length of time taken before an account is charged off extends for much longer than three months, especially when it comes to medical debt.
And, as stated earlier, just because your credit report shows this debt as 'charged off' that fact does not relieve you of the legal responsibility to repay what you owe. Until the statue of limitations has run its course in the state you live in (sometimes in as little as five years), you will still be legally indebted to repay this debt.
This is why collection agencies are so quick to try and get you to confirm you owe the debt or get you to make even a token payment, as this reset the clock on your debt and the statute of limitations gets extended. You can learn more vital tips on how to fight collection agents trying to reage your debts.
Also, you may want to be aware of and avoid the 7 biggest lies told by collection agencies.
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