It is a common misconception that once a debt has been charged off by a creditor that the creditor can no longer collect on the debt and the debt just kind of goes away. Unfortunately, that is not the case.
A charge off is actually merely an accounting procedure by the creditor, whether it is a bank, credit card lender, mortgage company, auto loan company, or any other type of creditor. The creditor has at that point decided the account is no longer an asset to the company.
Although the debt being charged off by the creditor is not a defense to having to pay the debt, there may be another defense. Whether the creditor or a collection company for the creditor can collect on the account depends on the statute of limitations. In Alabama the statute of limitations for most debts is either 3 years or 6 years, depending on the type of debt, from the last payment made on the debt. Be careful here, a payment of any type toward the debt could make a debt which has passed the statute of limitations or is about to pass the statute of limitations collectible again for another 3 or 6 years. Many times you may not hear anything about the debt for years, but out of the blue you are sued or begin receiving collection phone calls or letters regarding the debt. This often happens when a debt has been sold or transferred to different collection companies or debt buyers.
If you have been sued on a charged off debt or are being harassed by a creditor or a collection company, a bankruptcy may be your best way to stop it. There may also be other ways to defend against the debt or settle the debt. Please educate yourself and do not let yourself be bullied by these companies. Order my book by clicking here and/or contact an experienced bankruptcy lawyer immediately.
I am an attorney located in Cullman, AL. I practice extensively in the area of consumer bankruptcy law, that is, I file Chapter 7 and Chapter 13 bankruptcies for individuals. I handle cases all over North Alabama and have helped hundreds of clients through the bankruptcy process., I receive many referrals from former clients and their families and other attorneys. Why? Unlike other firms, I have a local office. If you are from out of town, we have the technology available to keep your traveling to a minimum. Also, unlike many firms, you will meet personally with an attorney, not a paralegal. An attorney will handle your case from start to finish. ,