charge off?

Discussion in 'Credit Talk' started by cchell, Jul 23, 2004.

  1. cchell

    cchell Member

    What does charge off mean?
     
  2. lbrown59

    lbrown59 Well-Known Member

  3. numnuts20

    numnuts20 Well-Known Member

    Charge Off - Accounting term to indicate that the creditor does not expect to collect a balance owing on an account.

    When a creditor writes a debt off as a loss for tax reasons, it is called a charge off.

    They do this when the account becomes extremely delinquent. Make no mistake, this does not mean they have given up on collecting the debt. On the contrary, the creditor may sell the debt or turn it over to a collection agency.
     
  4. mark

    mark Well-Known Member

    paid charge-off
    isnt that a contradiction in terms?

    example, electric co says you owe an old bill, they tack in into your current one..its a charge-off on your CR. you pay the debt eventually in your monthly payments..all of a sudden your CR says 'paid charge-off'
    so, did they charge it off, take the loss and then get your money collected back to them on top of that? are there any tax gains or benefits for a charged-off account for a huge company like that?
     
  5. jam237

    jam237 Well-Known Member

    when a CO is PAID, then that is INCOME which they need to report to offset the previous LOSS for the same account.

    The question is how do we know that they will actually do it like they are supposed to, ENRON comes to mind... :)
     
  6. lbrown59

    lbrown59 Well-Known Member

    Another question is didn't you just pay income tax on income that you never received????????????????
     

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