Tweet

Beware of Charged off Debts!

Guest post by: John Kevin

Article Overview: As debtors you will want to look for an easy solution to the sticky situation you have gotten into – not being able to pay the debt. You and the creditor may come into an agreement over the debt and he will agree to charge off the debt because it has become worthless. It is known as “Specific Charge Off” method.

Beware of Charged off Debts!

As debtors you will want to look for an easy solution to the sticky situation you have gotten into - not being able to pay the debt. You and the creditor may come into an agreement over the debt and he will agree to charge off the debt because it has become worthless. It is known as "Specific Charge Off" method. This method though may put you at ease has issues to be cautious of. When the creditor charges off the debt he is showing a loss in his income tax. This does not mean that the debt is dead and cannot be recovered. He can still recover from you at a later date.

Note that your charged off debt is not "written off" or "cleared off". The creditor or the debt collection agency that bought the charged off debt can actually collect the debt. The creditor may sell the debt to third party collection agencies called Junk Debt Buyers who want to collect the debt at any cost. They buy all rights from the creditors and hence become the new legal owners of the debt. The debt collector now resorts to all and sundry practices to get his meat. However, the debt collector cannot harass you and can be sued under the FDCPA.

Once the debt has been charged off the creditor is required to report to the credit bureau within 90 days of the charged off date.

If possible, work out a deal with the collectors and pay off and get a "paid in full" on the paper. This assures you of a peaceful future. You may have the debt "written off" in case you are unable to pay it. However, if the debt is written off, it will appear as a bad remark on your credit report for seven years.

While negotiating with creditors or debt collectors about charged off accounts:

Remain calm and composed in case your debt is "charged off"

Do not give any future commitments that you may not be able to keep

Negotiate for a small amount to pay every month to keep from being charged off

Do not give postdated checks

Do not give your checking account details

Get everything on paper

If you are not able to negotiate with one agency, wait for another agency to pick up the debt

You may contact an FDCPA attorney to assess your case and take his help to proceed with legal action.

Related Articles
  Finances
  Alternative Student Loans
  Important Facts about Credit Counseling
  Consolidate Student Loans
  What Are The Limitations of Filing for Bankruptcy?
  Getting Boat Finance For Your Dream Boat
  When Should I Consider Filing for Bankruptcy?
  SBA Guarantee Fee Explained
  Bad Credit Student Loans
  Reserves and Provisions
  Sole Trader Business Finance - The facts you need to know
  How Does Debt Consolidation Affect Credit?
  Reduce Your Debts
  Adjustments of Final Accounts
  Refinance Student Loans
  Debt Settlement and the facts of associated Income Taxes
  6 Things to Do With Your Tax Refund.
  Good Debt, Bad Debt: Know the difference
  Donald Trump's Bankruptcy
  Debt Management Help

Article Tags: debt collection laws, Debt Collection Rights, debt collector harassment, fair debt collection, fair debt collection act, Fair Debt Collection Practices Act, FDCPA



Related Forum Posts
Re: Buy An Established Affiliate Marketing Website - Hi David and GT, thanks for posting this here. My site is going for way below value and will be a great deal for someone. The links provided are a great resource for anyone looking to buy and sell websites. The Internet is all about information and you can know what you are getting before you buy. It's a little better than days past where it was "Buyer Beware". Steve


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

The OLD Way of Advertising, May Not be so OLD

Top Ten Home-Based Businesses

Pay Per Click Advertising

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.