The Term “Charging Off” Credit Card Debt in a Chapter 7 Bankruptcy Case
A San Francisco Bankruptcy Attorney speaks to charge offs in bankruptcy...
If you ask a reputable San Francisco bankruptcy attorney, they may tell you that A Chapter 7 bankruptcy will discharge any unsecured debts, such as credit cards, if the debtor passes the means test. However, debtors have asked if the credit card debt is still a debt if has been “charged off.” It is a misconception to believe that if a credit card company or other creditor “charges off” the debt, that it means they no longer owe the money, or they will no longer try to collect on that debt. This is not true. A charge-off is basically just a bookkeeping entry. It has nothing to do with the legal status of the debt.
Usually, creditors will sell the accounts on which they are owed money to a third party collection company, who then owns all the rights to pursue the debt, just as the original creditor did. What ends up happening is that a debt you thought was long gone suddenly resurfaces after several years, when the new owner of the debt commences a lawsuit to collect on it. This can have an impact on your credit report, because if that creditor gets a judgment, then the judgment will be on your record for at least another 7 years. Therefore, a “charged off” debt is still a debt that is owed to be included in your bankruptcy since the debt has not gone away.
If you have questions regarding bankruptcy in San Francisco or bankruptcy in the greater Bay Area please contact our San Francisco Bankruptcy Attorneys at (415) 946-8882 for a free consultation or visit www.bkanswers.com and we can connect you with one of our experienced San Francisco Bankruptcy Attorneys. After you have spoken with one of our Bay Area bankruptcy attorneys, we can schedule you for a free face to face appointment in an office location nearest you. Our team of Bankruptcy Lawyers, Bankruptcy Customer Care Specialists and Bankuptcy staff supporting San Francisco and Bay Area consumers in debt can assist you with all aspects of your bankruptcy or bankruptcy litigation case. If you have questions about filing a Chapter 7 bankruptcy, a Chapter 11 bankruptcy, a Chapter 13 bankruptcy, or would like to learn more about bankruptcy litigation, legal debt settlement, mortgage modification, lien stripping, cram down, stopping a foreclosure, wage garnishment, asset protection, discharging a debt, etc. we can help! We have bankruptcy attorneys located throughout California and Oregon who can assist you with all of your debt resolution questions. Please feel free to complete our free online bankruptcy evaluation and we can quickly determine if you are a qualified candidate for bankruptcy. We look forward to hearing from you, San Francisco Bay Area!
