What does a charge-off mean? And can the amount of the charge-off keep getting larger?

1 Answers

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  +1 Votes 1  0

  Pinyo on May 28, 2010

  When a company charge-off your account, this means that the company is considering it a loss for accounting purpose. This does NOT mean that you no longer owe the debt – you’re still responsible for what you owe.

  Your creditor will add a negative entry to your credit report and continue to attempt to collect on the debt. The charge-off will stay on your credit report for seven years from the date it was charged-off. If you pay the debt, it will be updated with a status of “Charged-Off Paid” or “Charged-Off Settled.” Although these are better than the “charge-off” status, they are still negative.

  Source: About.com – What Is A Charge-Off

  As far as accruing interest, yes the debt you owe is still a debt and it continues to grow until you take care of it.

  Source: WikiAnswers – Does interest accrue on a Charge Off?