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Can creditors collect after a debt is charged off?

Can creditors collect after a debt is charged off?

Full question:

After a debt is charged off can the creditor try collecting from a person later?

Category: Debts and Credit
Date: 04/07/2025
State: National

Answer:

Yes, creditors can attempt to collect a debt even after it has been charged off. A charge-off occurs when a creditor writes off the debt as a bad debt, typically after six months of non-payment. This means the creditor no longer lists the debt as an asset on their financial statements. However, the borrower is still legally obligated to pay the debt, as the charge-off does not eliminate the obligation to repay the amount owed.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

Can a debt collector restart the clock on my old debt?

In some cases, a debt collector can restart the statute of limitations on an old debt by acknowledging the debt or making a payment. This means that the time period during which a creditor can sue you for the debt may reset. However, this varies by state, so it's important to know your state's laws regarding debt collection and the statute of limitations. Always consult with a legal professional for guidance specific to your situation. *Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.*

Can a creditor collect after charge-off?

Yes, a creditor can still collect on a debt after it has been charged off. A charge-off indicates that the creditor has deemed the debt unlikely to be collected, but it does not eliminate your obligation to pay. The creditor may sell the debt to a collection agency or continue to pursue collection efforts themselves. It's important to remember that you still owe the amount charged off. *Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.*

Can a collection agency open an old debt as new?

A collection agency cannot legally open an old debt as new if the debt is still within the statute of limitations. However, they can attempt to collect on the existing debt and may report it as a new collection account. If they misrepresent the debt, it could violate the Fair Debt Collection Practices Act. Always check your credit report and seek legal advice if you believe a collection agency is acting improperly. *Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.*

Does disputing a collection restart the clock?

Disputing a collection does not restart the statute of limitations on the underlying debt. However, if you acknowledge the debt or make a payment during the dispute process, it could potentially reset the clock. It's essential to understand your rights under the Fair Debt Collection Practices Act and how disputing a debt may affect your situation. Always consult with a legal professional for advice tailored to your circumstances. *Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.*