People who fall seriously behind on debt may be concerned about charged off debt. For credit card debt, charge-offs take place 180 days after minimum payments stopped being made. At this point, the bank or creditor regards your debt as a loss. Although your bank or creditor no longer considers your debt to be “collectable” you are not off the hook for the debt. Rather, you can expect these unpleasant consequences for any charge-off accounts.
Payment is Still Expected
Debt is never forgiven without significant consequences. Just because your account was written off as a loss does not mean that you no longer owe the debt. In many cases, your lender will decide to pursue the full debt before the state-mandated statute of limitations. Your bank, creditor, or lender is entitled to do so until that date.
In Illinois, the statute of limitations on debt collections bars collectors from pursuing a lawsuit to collect on your debt after a period of 5 years. This can be affected by any written contracts. The clock can be restarted if you make even just one more minimum payment. If your debt is older than 5 years, talk to an Illinois debt relief attorney about your options.
Payment Goes to Another Entity
After 180 days it is common for banks to pass debt onto collection agencies. They sell your debt to these agencies; these agencies do not collect on their behalf and thus legally take ownership of your debt. Your debt can be sold for as little as 3-10 cents on the dollar, which means these collection companies stand to make a significant profit off your debt should you pay it back. When you have a charge-off on your account, it helps to get an experienced debt collection and settlement lawyer involved.
Your Credit Score Suffers
A charge-off on your account is a huge blow to your credit score. This charge-off can prevent you from being approved for new credit cards, extending your credit, or even from acquiring a loan or being approved for a mortgage. You can say “sayonara” to your dream of buying a new home or car, even if you are financially ready to do so otherwise. This charge off remains for seven years.
How can an attorney help?
When you work with a knowledgeable and determined credit card relief attorney like Heather Benveniste, you reclaim your ability to take the reins on your financial state. Heather can help you negotiate a deal on your debt so you can move toward a debt-free life! Call 1-800-497-5358 for a free consultation or contact Heather here.