What is a Charge-Off?

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A charge-off occurs when a creditor, such as a credit card company, determines that a debt is unlikely to be collected. This happens when an individual is extremely delinquent on payments made to the creditor. Many companies make a charge-off declaration after six months go by without a payment.

Even after a charge-off has been “written off as uncollectible” by the bank holding the debt, the debt itself is still valid from a legal stand point. It remains legally valid even after the charge-off has occurred. This means that the creditor has the right to try and collect the debt using any legal means available, such as, collection calls from internal staff, collection calls from outside collection agencies, arbitration or even a lawsuit.

How Does a Charge-off Relate to an FDCPA Case?

The Fair Debt Collection Practices Act (FDCPA) is a federal law that regulates how third-party debt collectors, such as collection agencies, are allowed to behave when they are attempting to collect debts. The act limits the ways in which debt collectors can contact debtors and specifies the times of day and number of times collection calls can be made. Debt collectors may call once a charge-off has occurred in an attempt to collect the debt owed. The FDCPA protects the consumer from potential abuse inflicted by these debt collection efforts.

How Can an Attorney Help?

If you have creditors that are calling you repeatedly or at odd hours of the day or night, an attorney may be able to help. Your case can be reviewed to see if you have any rights under the FDCPA that you can exercise to help reduce or eliminate these collection calls.