If you cannot pay it off with a lump sum, work with the debt collector to establish a debt repayment plan. For instance, if the account is in collections, you should pay it off to minimize further damage. This situation should be handled quickly and effectively. Having a charged off account on a credit report can be troublesome and will damage your credit history and lower your score. After this time has expired, they can still attempt to collect the debt, but they cannot take you to court. This timeframe is called the statute of limitations and it varies in each state. Yet, there is a time limit in which a creditor or debt collector can sue you to collect payment. However, the information about the collection account stays on your report indefinitely as long as the debt collector actively seeks payments on it. The information and details about a charged off account will remain on your credit report for seven years after the last day of reported activity. When the account is in collections, you will see that the charged off account appears twice on your report, first as the original charged off account, which is now closed, and then, as a new collection account.

The creditor can collect the debt, sell it to debt collectors, or pursue legal action to collect the debt. Once your account becomes charged off, it does not go away. Usually this happens approximately 180 days after the first missed payment. In this context, charged off refers to an account that has become so delinquent that the creditor considers it a loss and has given up trying to collect any payments on it.

It doesn’t help that “charged off” is used interchangeable with “written off,” which in many scenarios means that the account has been paid off. Seeing a charged off account on your credit report can be a bit confusing because the term is not self-explanatory. What is a charged off account on my credit report? Dear Reader,

Charged off account