If you receive a notice that an old debt has been charged off, you may be inclined to write it off as a debt you no longer have to worry about. Unfortunately, that is not the case. Many people with old debt wrongly assume that charged off debt just goes away, and it does, but not for the borrower.
What Is Charged Off Debt?
A debt that has been charged off normally has to have gone unpaid for at least 180 days. After that length of time, the creditor that holds the debt can no longer count it as an asset, since they have no reason to believe that you are going to repay it. Because they assume it will not be paid, they take it off of their accounting books.
That does not at all change your obligation to repay the debt. Just because the creditor assumes you won’t pay it does not mean that they will not continually harass you until you do. On top of the enduring damage to your credit score, not paying a charged off debt will make buying anything on credit, like a house, extremely difficult.
How Can I Get Rid of a Charged Off Debt?
Repaying the debt is the easiest way to get rid of it. Some creditors will work out a payment plan that works for you, including reduced monthly payment plans, and possibly even lowering the overall balance.
If repayment is not an option, declaring Chapter 7 bankruptcy may be your best option. Filing bankruptcy will make creditors stop calling and harassing you about repayment. Also, after the bankruptcy, the debt could be discharged, which really does mean that the debt is gone for good.