Credit Card write off

by Santiago
(Pharr, Texas, USA)

When a creditor writes off your balance as income, does it go off your credit report?

Comments for Credit Card write off

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Aug 17, 2012
Credit Card write off
by: Debtcollectionanswers.com

Yes, the fact that your debt was written off (or charged off) is likely to appear on your credit reports and the information will be a big negative when other creditors look at the report. They will not want to extend you credit. Also, the write off may affect your ability to get a job, rent a place to live, and purchase adequate insurance.

The best thing you can do is pay the debt, which would mean that a new notation, "paid write off" would appear in your credit reports. However, the fact that your account was written off in the first place will remain in your credit history for 7 years and 6 months after your default date (The first time you did not pay the debt.).

If you want to get the debt paid off but cannot pay it in full, you may be able to settle it, which involves getting the creditor to agree to let you pay the debt in full for less than what you owe on it. This debt settlement podcast explains how settlement works. If you reach a settlement agreement with the creditor, do not pay the settlement amount until you get all of the terms of the settlement in writing.

If you pay off the debt, it's possible that you may be able to get the creditor to agree to have the charge off information removed from your credit report or to report it as "paid as agreed." If you are able to negotiate such a concession from the creditor, get it in writing before you pay the money.

If you do nothing, the creditor may eventually sue you for the money or turn your account over to a collection agency and if the agency is unable to collect what you owe, it may initiate a lawsuit at some point. In part it will depend on how large your debt is.

Aug 26, 2014
Credit card write off/discharge, dismissal
by: Anonymous

I am self employed. In 2002 was forced to file bankruptcy due to illness. In this bankruptcy was a $30,849.00 debt to MBNA for credit card debt. In 2008 the bankruptcy was discharged. In 2011 this company sent a 1099 to the IRS stating forgiveness of debt in the above amount. Now I am being charged taxes on the entire amount (which by the way also includes a lot of interest, which the company won't acknowledge. So now I owe the IRS over $6,000.00 in back taxes!! Is this fair, I don't think so---
What do you think? Oh, by the way, the attorney (Randolph Goldberg, Las Vegas, NV) was indicted on fraud charges and is now in Jail!!

This entire experience has been a nightmare--

Reply from DebtCollectionAnswers.com

Debt discharged in bankruptcy may be excluded from your income which means you do not have to pay taxes on it! Read IRS publication 4681 and fill out Form 982, claim the bankruptcy exclusion and include Form 982 with your taxes.

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