debt
 

 debt  legal







 

Question by  karen (23)

What is involved with a charge-off during bankruptcy?

I had a charge-off during bankruptcy.

 
+8

Answer by  patti (29325)

A creditor that learns that a debt cannot be collected then charges off the debt. This means it is a loss for the creditor. In the case of bankruptcy, the debt cannot be sold to other parties for future collection effort.

 
+6

Answer by  idiotjones (705)

A "charge-off", whether during bankruptcy any other time, occurs when the creditor determines that a pursue payment of a debt is not worth the cost. That is, if a debtor owes $100 and the administrative cost of obtaining that $100 is $120, a loss will ensue anyway. This way, the creditor writes off the debt and takes the tax benefit.

 
+5

Answer by  Potato (7)

A charge-off occurs when a creditor decides it won't be able to collect your debt, and writes it off in their taxes. You still owe the money, however, and your credit score is ruined.

 
+5

Answer by  slkunz2003yahoocom (836)

A charge off simply means that your debtor wrote off the balance due as a bad debt before the debt was discharged in bankruptcy court. This will not really make too much of a difference on your credit report, as a bankruptcy is worse than a charge-off. Expect 10 years of impact on your credit report from this action.

 
+4

Answer by  ybforz (83)

Bankruptcy includes forgiving all of your debt, yet for a certain period of time it is still on your credit report and background checks for several years. It is like starting over.

 
+4

Answer by  elynne (1153)

It is the legal term that describes what your creditor will be doing with your debt with them. The amount of the charge off during a chapter 11 case will show up on your credit rating/ report for the next 7 years and will give you potential problems reestablishing a credit history

 
+4

Answer by  eyeguy (3760)

If listed at the beginning of your bankruptcy, a debt is not allowed to be placed as a charge-off. A charge off is not legal while in bankruptcy

 
+4

Answer by  tamarawilhite (17883)

If they charge off the debt, it means the loan originator says they cannot get it back and writes it off as a loss. You then will be taxed on that amount as income, because you spent the money and did not have to pay it off. This does hurt your credit score.

 
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