meaning of charge off debt

What does it mean when a credit union closes your automobile account for a voluntary repo and call it a charge off/ bad debt profit and loss write off and what are the next steps do they take after this what can I expect.

This occurs when a consumer becomes severely delinquent on the debt.Traditionally, creditors will charge-off an account after six months (180 days) without payment. A "charge-off" on your credit report means that your creditor has written off your unpaid debt to get a tax deduction. When you hear the term "credit card charge off," you might think it means the creditor has given up on being paid and you no longer owe any money. When a creditor charges off a debt, it removes the account from its list of current assets. After several months of non-payment, a creditor writes off the debt as a loss—in their accounting books—cancels your account, and demands that you pay the past due balance in full.

Charge-offs usually occur after you fail to make any payment (or at least the minimum payment) for six straight months (180 days). If you are working with a debt relief firm, make sure you first ask your creditor about its policies. A charge-off is what happens when you fail to make your credit card payment for several months—usually six months in a row. Vyi's response was: Helpful Not Helpful. Charge-off What is a Charge-off? Charged off debt is debt that a creditor removes from their books and either tries to collect through in house operations or by selling the debt off to another debt buyer. On the contrary, a credit card charge off means you are more than 180 days late on your payment and the credit issuer considers the debt uncollectible. This is a very negative mark on your credit score, and will remain on your report for up to seven years.

Creditors report this debt as charged off so that they can receive a tax exemption from the government.

You still owe charged-off debts, and failing to make payment arrangements can carry severe consequences.

Collections. Time-Barred Debt: Money a consumer borrowed and didn’t repay but which is no longer legally collectable because too many years have passed. This usually occurs when there has been no payment on debt for over 180 days.

Also known as a Profit and Loss Write-off, a charge-off or chargeoff is the declaration by a creditor that a debt is unlikely to be collected.

What You Need to Do to Remove a Charge-Off from Your Credit Report .

When your creditor can no longer invest time and resources pursuing your delinquent debt, it will charge off the account.

If you manage to pay off your debt, the charge-off is relabeled by your creditor.

Also, some banks will not work with debt settlement companies, but only directly with you to settle a debt before charge-off. The new entry might appear as “charged-off settled” or “charge-off paid.” Either way, it remains on your credit report until the full seven years has passed. A charge-off is one of the worst items you can have on your credit report. In most cases, however, it is still advisable to settle your credit card debt before it is charged-off. As for having to pay it back, you're not going to get off that easily.