Charge offs are accounts which a creditor has attempted collecting from consumers in the past and has deemed it uncollectible and has marked it down on their credit reports as an unpaid debt. Charged off accounts generally has a balance shown on the consumer’s credit report indicating the charge off status. It can contain the word paid, charge off or loss and profit. If a creditor attempts to contact the consumer on a charge off account the first step in dealing with a charge off is not to ignore it, but to begin collection efforts. The purpose of this article is to provide insights on how to deal with charge-off accounts.

charge off accounts

The first thing to understand is that in most situations if a creditor makes contact with you to try and work out a payment plan, the more likely it is you will be far behind and will probably receive no contact from the creditor after this. Most people that have a charge off in their credit card payments will receive a letter from the credit card companies indicating a charge off status. Some companies will not even attempt to contact the consumer and will just inform them the charge off has gone through. In some cases the consumer may receive the notification via email only and then it may take up to a few weeks for them to actually initiate contact. A way to get past this and start working with a creditor is to make an attempt to pay the full amount owed on the credit card as soon as possible.

The second step is to make contact with your creditor as soon as possible. If you can pay the minimum payment on time this will help the progress of the negotiations. Creditors often are wary of dealing with delinquent accounts because they view it as an indication that the consumer is behind on credit card payments. However if you have been making a large number of late payments or have an extreme amount of money in charge off accounts then this is an opportunity for you to negotiate with the credit card company for a settlement. You can request that the collection agency stop sending you collection calls and try to write to them instead. Any of these efforts may pay off in the way of getting the account paid off quickly.

If you find yourself having to continually contact your creditors, you may want to try to arrange a payment plan. This means that you will set up a schedule to where your debt will be paid off within a certain period of time. This allows you to work within a budget and not fall behind. Creditors often prefer to negotiate with clients who have a solid payment history. By having a history of on time payments the credit scores are often improved allowing for easier negotiations. If you have charged off debts in the past and are not current on payments this will definitely impact your credit scores.

The third step involves contacting each of your creditors and writing a letter stating that you have no longer had to charge off accounts and you are willing to negotiate a settlement. Most creditors will be happy to do this if it means their money will be at least saved. You will need to give each creditor a specific amount of time to respond. You will also need to include copies of any previous correspondence that you have sent to your creditors. It is important that all correspondence be in writing as it will remain on your credit report for seven years.

Once you have written the letters and provided all the information to your charge off creditors, you should wait a minimum of one month and make sure the accounts are actually paid. If you do not pay them they will go onto your credit report as charge offs. These charge offs will remain on your credit card for seven years. After a full year the charge off will be removed from your credit report but it will remain on your report for another ten years. If during this time the loan that you have agreed to be able to pay off is not paid off you may be subject to legal action by the charge off debt creditors.

If after the seven day period and after all collection agencies have been contacted the charge offs are still not paid the charge off will be deleted from your credit report permanently. It is at this point you will be required by law to seek credit repair help from an accredited credit counseling company. They will assist you in the areas of disputing the charge offs with the credit reporting agencies.

If you cannot settle your accounts with your creditors through negotiations, make sure you follow through with the collection agencies. You should send them all the documentation that is available to prove that you can settle your debts. Creditors are legally obligated to settle your debts if you are unable to pay them. This can be done through budgeting, alternate sources of income or through settlement. If you have problems paying off your charge offs consider working with a collection agency to collect on your behalf. They will work in conjunction with your creditors and try to reach a financial solution with them.