Top 5 Reasons to Avoid Bankruptcy in Illinois and Opt for Debt Settlement Using Benveniste Law Offices
There is plenty of financial jargon that gets tossed around in reference to credit cards and loans. Terms like tort and insolvency can easily confuse the average person and inhibit his ability to comprehend legal documents. Many people choose to simply ignore or read over terms they cannot understand, but that is not necessarily the most favorable decision. The terms “charge-off” and “write-off” are another two that many confuse. Although they sound similar, it would be a great mistake to assume that they mean the same thing.
Credit Card Charge-Off
The term “charge-off” is applied to an account when it officially reaches 180 days past due. Internally, the creditor updates the status of the account from a performing to a non-performing asset for accounting purposes. Many people see that an account was charged off and make the unfortunate mistake of assuming that the creditor has forgiven their debt when in all actuality, it is a mere reclassification.
Creditors can still pursue collection of the outstanding amount, and they can do so in several ways:
- Continue debt collection efforts internally
- Hire a debt collection company to continue collections as an agent of the creditor
- Sell the charged off account to a third party debt collection agency
Even when a creditor sells an account, debtors must remain aware that debt collection can legally ensue. Debt buyers have two options when they purchase an account: to either pursue collections themselves or resell the account to another debt buyer. In either case, debtors can expect to receive unrelenting contact attempts from unfamiliar collection agencies.
Credit Card Write-Off
Credit card write-offs are much simpler and can actually benefit the account holder. Although a write-off does not completely get rid of debt, it does waive a portion of it. A good example is when an individual owes $23,000, and a creditor agrees to settle the account for $11,000. This means that they are willing to write off $12,000, which comes as a great benefit to the afflicted debtor.
Do not allow 180 days to pass without taking action. Heather Benveniste with Benveniste Law Offices can provide you with adequate legal representation throughout the debt relief process. With seven years experience working as a debt collection attorney, she understands how the other side operates and can use that knowledge to your benefit. Contact us today at 1-800-497-5358 for a free consultation. You don’t pay a dime until we win your case!
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