credit report3You have been informed by a creditor that your debt has been “charged off,” or your credit report shows that a debt has been charged off.  You believe that this is the end of the matter, but all of a sudden you find out you have been sued for the debt by a debt collector.  Can they do that?  The answer is yes.  The term “charge off” can be a little confusing, but basically it is an accounting term that means the original creditor has given up trying to collect the debt from you.  There may be a few reasons they do this, including their internal tax accounting.  They may then report it to the credit bureaus as an “I9″ or R9” charge off, which are two of the more negative entries.  However, contrary to what many people may believe, a charge-off status, while an accounting/reporting term, is not a legal term.  You can be sued for a charged off debt the same as any other debt.  In fact, it is quite common for large creditors to ship their charged off debts to collectors, who then use any legal (and sometimes illegal) means to collect.  Importantly, you still have all of the other defenses you may have otherwise had, including the statute of limitations, and debt collectors still have to comply with every requirement of the Fair Debt Collection Practices Act (“FDCPA”).  If you have been sued, it is always a good idea to call a lawyer or two in your area.

Scott Riddle is a Bankruptcy and Foreclosure lawyer in Atlanta, Georgia.  The best way to contact us is by phone at 404-815-0164. You can also email, or contact us through the contact page.