If My Debt is Charged Off Do I Still Owe It?

19 Oct If My Debt is Charged Off Do I Still Owe It?

Yes. A charge off is only relevant for the lender’s accounting and tax reporting; it does not relieve you from your liability to pay the debt. There are many debt elimination scams out there that advertise on the internet. Some of them propagate the theory that once a debt is charged off a consumer no longer has to pay it. I have heard from people who have been taken in by this myth. However, a charge off just reduces the value of the lender’s loan portfolio. If a lender later collects a charged off debt or sells the right to collect it to a debt buyer, the value received is added back into the lender’s balance sheet. Of course, a bankruptcy discharge discharges debts irrespective of the charged off status of the debt on the lender’s books.

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Nicholas Ortiz, Boston Bankruptcy Attorney

From Attorney Ortiz: We have been helping consumers and small businesses in Massachusetts successfully navigate through the bankruptcy process since 2002. We offer free initial consultations and payment plans. Call us at 617-716-0282 to discuss your debt relief options. Mention the Bankruptcy Law Network when you call!
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