Lewisville Bankruptcy Attorney: There is a common misconception amongst debtors that once a debt has been charged off by a creditor the creditor can no longer attempt to collect the debt. Charged off debts are still collectible, and may be so for years after the debt was charged off. The IRS allows creditors to charge off debts that they deem uncollectible or worthless. Creditors are allowed to take a loss on their income taxes when they charge off a debt. However, creditors can still come back later and attempt to collect the debt. Sometimes the creditor will sell the charged off debt to a third party collection agency who then attempts to collect the debt. The collection agent has the same rights of collection as the original creditor. The debtor will continue to be liable for the debt until the statute of limitations runs, the debt is paid, or the debtor receives a discharge in bankruptcy.
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