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What is involved with a charge-off during bankruptcy?

I had a charge-off during bankruptcy.

asked by karen (16)

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Tags:  debt  legal

answers

A creditor that learns that a debt cannot be collected then charges off the debt. This means it is a loss for the creditor. In the case of bankruptcy, the debt cannot be sold to other parties for future collection effort.

reply
posted by patti (17879)
8 votes

A charge off simply means that your debtor wrote off the balance due as a bad debt before the debt was discharged in bankruptcy court. This will not really make too much of a difference on your credit report, as a bankruptcy is worse than a charge-off. Expect 10 years of impact on your credit report from this action.

5 votes

If they charge off the debt, it means the loan originator says they cannot get it back and writes it off as a loss. You then will be taxed on that amount as income, because you spent the money and did not have to pay it off. This does hurt your credit score.

4 votes

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