What is a charge-off?

[nickname]

I have items on my credit report labeled "charged-off" and I wanted to know if that meant I still owed it or not? What exactly is a charge-off debt?

[planchalaplancha]

A charge off means that the creditor considered your debt uncollectable and did a few things with your account. When you stop paying on a credit account, most creditors will try to get you to pay by calling and sending you late notices. If you dont make payments, eventually the creditor will consider the debt uncollectable. You see creditors pay taxes on your debts as assets for their corporations so by reporting it as a loss to the IRS, they save a few bucks and consider it a charge off. This means that they really cant continue attempting to collect it, so they typically sell it to a 3rd party and report it as "charged off debt" to the credit bureaus Equifax TransUnion and Experian. Hence the word charge off. Please remember that this does not mean your off the hook. You still owe the debt, its just creditor lingo you need to be getting used to if you dont pay your bills on time.

[leonora]

The creditor has determined that you are never going to pay your debt, so they have written it off as unrecoverable. This is called a Charge-off, which is why it showed in your credit report.