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Sued By a Credit Card Company: Facts About Old, Charged Off Credit Card Accounts

Sued By a Credit Card Company: Facts About Old, Charged Off Credit Card Accounts

For many people who are being sued by their credit card company, the process that led them to the very situation they are in now is somewhat hazy. This article aims to help delinquent debtors know more about what charged off account meant and what information can help their cause when they are sued by a credit card company.

A charge off credit card account refers to delinquent debts that credit card companies write off their books. Card companies and banks are required by law to charge off certain debts that has met a certain level of delinquency. For example, credit card debt will be charge off once it reaches 180 days of not being paid while personal loans only has 120 days before it will be charge off.

Apart from credit cards, charge off may be used with other types of debts as well including those that stem from mortgage, vehicle loans, etc.

If an account is charged off, what will happen next?

Unfortunately, many delinquent debtors tend to think that once their accounts have been charged off, they can forget about the unpaid balance. The fact is, debts don’t just disappear on their own and yes, debtors are still held responsible for paying the money they owe. Charge off accounts will continue to be counted against the credit card companies’ reserve funds as a loss and will still hold relevance to the card companies’ taxes. Before being sued by a credit card, agents will try to collect from delinquent debtors. If the card company can no longer handle the collection, they have the option to sell the account and let a junk debt buyer handle the collection.

Debtors are legally liable to pay the unpaid debts otherwise; they might get sued by their credit card company, regardless whether or not their accounts have been charged off. In order to determine how the period in which you have to repay your debt, you need to check with your state’s statute of limitations.

Note that charged off accounts will remain on debtors’ credit reports for seven and a half years following the first delinquency. This means, you will get a bad mark on your credit rating, making it extremely difficult to secure any type of loan in the future. So don’t wait until you get sued by your credit card company to repay your debts. Start taking action and you’ll be saving yourself from a lot of headache.

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