Q5. Do I
have to pay a charge-off
Many consumers have the
misconception that a
charge-off
means they no longer owe the balance. It's easy to make that mistake -
"charge off" sounds a little like "write off" and in the world of taxes, a
tax "write off" reduces the amount you owe. Not so in the world of credit
cards and loans, at least not for the debtor.
When
creditors charge off accounts, they're declaring it as a loss, writing it
off on their own taxes. As a result, the creditor might owe the federal
government a little less. You, however, are still responsible for repaying
the debt. The creditor can still attempt to collect on the debt and might
even hire a third-party debt collector.
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