Definition of a Charge Off – a charge off is usually associated with a consumer credit account and is something that happens when the debtor becomes severely delinquent on an account.
Here is the path of a charge off:
- debtor stops paying
- credit tries to collect with “in house” collection efforts
- time passes and creditor gives up believing collection is impossible
- creditor charges off debt and sends it to a collection agency
- the creditor gets a tax break for any amount that was charged off
If you are a consumer and have charge offs, your credit history is probably severely damaged. (This is what happened with two of my credit cards. I was twice rejected for auto loans because of my two charge offs).
You can try removing charge offs yourself by way of a credit dispute letter. Or, you can wait seven years for the information to automatically fall off.
Which do you prefer. I found a website where you can remove charge offs yourself if you prefer to get started without hiring an attorney.