Charge-off or "Profit and Loss Writeoff" means that an account became more than 6 months past due. At that time the Creditor has the right to recover their losses by further collection activity such as a lawsuit or sending the account to "collections." When this happens, usually the collector is only collecting on behalf of the original creditor and did not purchase the debt. And although these 3rd party collectors are under the restraints of the Fair Debt Collections Practices Act, FDCPA, the collectors are often rude, pushy, nasty and make statements that are untruthful in order to coerce a payment from debtors who are already stressed and struggling.
So what do you do about it? Well you have four choices:
1) You can do what MOST people do and bury your head in the sand. You can refuse to answer your phone and you can choose to not open your mail but ignoring the problem really won't make it go away. It will only compound the problem.
2) You can try to talk to the creditors and reason with them and work something out. And while this sounds noble and like it has merit, the creditors and their collection agents are often incapable of talking in a polite manner and are usually unable to be reasonable. Don't blame them too much. They are merely mindless pawns in the whole scheme of things just taking orders from the management. Then you will find yourself saying to yourself: "Why won't they work with me?" Well its mostly because banks are in the business of making money on the interest you pay them and when you stop paying they create this system of collecting money that is unworkable. Somewhere along the way, collectors decided that being rude and making threats and raising your interest rates was a good idea. What chumps! Now some people do get intimidated and decide to make a payment and you may be one of them. Don't feel bad if you did. It happens. You are doing your best to make your payments and they return the favor with treating you like a lowlife.
3) You can go to a debt consolidation company. This process is outlined in our page on Debt Consolidation. Trust me, it doesn't work out well for most people.
4) You can consider filing bankruptcy. I know it seems like a dirty word. But if you consider the possibility of filing, you might just discover a means to an end. An end to the phone calls. An end to the rude collectors who are determined to make you pay. An end to worrying about how to pay your creditors. An end to anxiety and sleepless nights. Don't you think you have paid long enough? It won't cost you anything to find out about bankruptcy.
