Can I be sued for a debt that has been charged off?
Yes, you can be sued for a debt that has been charged off. This could be for credit card debt or another type of debt.
The term “charge off” means that the original creditor has given up on being repaid according to the loan’s original terms.
Many people confuse the terms “charge off” and “forgiven.” You do not usually owe the balance if your unpaid debt has been forgiven. However, a charge-off means that one creditor has written the debt off and either sold it or gave it to another debt collection agency to collect on.
If your debt has been charged off, you do owe the balance. Nonpayment can result in legal action from debt collectors and debt collection agencies. You may be sued, resulting in consequences such as a frozen bank account or wage garnishment. The court may issue a default judgment against you if you don’t respond to a lawsuit. Not to mention, nonpayment looks bad on your credit report and can hurt your credit score.
Debt owed through charge-offs is subject to the applicable state laws for statute of limitations, so be sure to check if the debt isn’t “time-barred.” If it’s old debt that’s time-barred, a debt collector or agency can still attempt to collect the debt, but they cannot sue you. Be aware of your rights through the Fair Debt Collection Practices Act (FDCPA), and check out resources available from the Consumer Financial Protection Bureau that may help you with debt collection.
If you are unsure whether your debt has been forgiven or charged off, contact a law firm that can assist you in locating this information. Depending on the financial institution, lender, or credit card company, you may qualify for a debt relief option. Asking thorough questions will help you make financial decisions with confidence. Options might include debt settlement and setting up a payment plan with monthly payments. Making small, regular payments on your outstanding debt could help you get through financial hardship and avoid debt-collection lawsuits.