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Local Law Firms Home > Bankruptcy Debt Relief Overview > Bankruptcy and Credit Repair Help > Charge-offs When you become very late with payments for a credit card or other type of loan, the lender will likely charge it off. In other words, for tax purposes, they have written the debt off as a loss. This does not mean, however, that they have given up all efforts on collecting the money that you owe them. The lender is now likely to either send it to a collection agency or sell the debt. Would you like to know more about filing for bankruptcy and charge-offs? Our bankruptcy lawyers can help you. Contact a bankruptcy law attorney in your area today to learn more about the legal aspects surrounding a bankruptcy filing. Being ineligible for larger loans or lines of credit can hinder your ability to be accepted for:
Negative facts remain on your credit report for seven years, except for a Chapter 7 bankruptcy, which remains on a credit report for 10 years. Doing the math may lead you to think that if you allow the lender to charge off your debt and then wait it out on your credit report, then you're better off than you would be if you decided to declare a type of bankruptcy. Here is the main distinction between the two strategies. You no longer owe the payments when the balance is discharged by the bankruptcy court. When you attempt to wait out a charge-off, you are risking that the creditor won't go to court and win a judgment against you, and then follow the necessary process in order to collect on that judgment. A judgment shows up on your credit report and can remain here for seven years, or more in some scenarios. For more information about charge-offs and bankruptcy laws and how they affect your specific situation, contact us today.
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