Re: Charge offs

Posted by Drew (24.59.27.46) on October 23, 2003 at 11:00:23:

In Reply to: Charge offs posted by Jillian on October 23, 2003 at 10:44:21:

Credit card chargeoffs are delinquent credit card debts. The company is required by law after 180 days to charge off an account that is delinquent. So 180 days after last payment, the account is charged off.

Basically the company believes that it is an uncollectable debt.

They are required to do this for accounting purposes so they have a means of separating the good accounts recievables from the bad accounts recievables.

Usually after the charge off, the company will either outsource these charged off bad debts to other collection agencies or receivable firms who will attempt to collect, usually for a percentage commission, or they will sell it to another company, a debt buyer(collection agency) or they will send it to an collection attorney if the amount is high enough and there are enough assets to collect.

I hope this helps.

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