Do You Have to Pay Back a Charge-off From Creditors?

If you have an account that's been charged-off, it doesn't mean that you don't owe the debt; it only means that the lender now considers your loan a business expense instead of an asset. Charged-off accounts are usually turned over to collection agencies, which then will contact you repeatedly for repayment. Having a permanent charged-off account damages credit severely, so making good will keep your score respectable.

Instructions

1

Call the lender or collector and ask for a debt validation letter. The debt validation letter will contain the lender name, the amount you owe, contact information and instructions on how to proceed if you don't think you owe the debt.

2

Review the debt validation letter and contact the collector if you owe the debt. If you don't owe the debt, follow the instructions on the letter to resolve the dispute.

3

Work out a repayment plan with the collector. Be polite, brief, firm and honest. Tell the representative how much you can afford to repay; you may be surprised at how flexible a repayment plan can be. The collector should send you a written confirmation of the payment arrangement.

4

Contact the Federal Trade Commission if the collector violates the Fair Debt Collection Practices Act. The collector may not threaten or harass you repeatedly. It may only call you at certain times and not at your office if you request it.

5

Repay the debt per the collection agreement. Do not default; the collector has the right to take you to court. If the collector wins in court, it may garnish your bank account or wages.