How to Eliminate Charge Off Credit Card Debt

Charge-offs are accounts that a creditor has deemed "uncollectible." These are serious delinquencies on a credit report. If you have any charge-offs on your report, you should take immediate action to remove them. However, this process can be challenging. The credit bureaus reserve the right to report delinquent debt for a period of up to seven years, but they are not legally obligated to do so. Therefore, if you make a compelling case to them, the credit bureaus may remove negative items from your report.

Instructions

1

Pull a copy of your credit report to verify that the charge-off actually exists. Visit annualcreditreport.com to obtain a free copy. Once you obtain your report, look in the Public Records section for any charge-offs. These accounts will be shown as at least 120 days overdue.

2

Contact the original creditor to obtain a payoff statement. A payoff statement is a bill that reflects the total amount due on the account including all back interest, fees and late charges. It will have a good-through date (expiration date). Pay off the remaining account balance, if you can.

3

Arrange a repayment agreement if you cannot afford to repay the debt in one lump sum. You will likely need to agree to a monthly repayment plan. Your monthly payments will be based on your monthly income. Make photocopies of your income documents (pay stubs, W-2s) and either Fax or mail them to your creditor. Begin making payments on your debt. Your charge-off balance must be paid in full before you request its removal from your report.

4

Review the time period in your life when the account went delinquent. The credit bureaus will want a reason for the delinquency. This could be due to unemployment, disability, medical bills or a death in the family (the breadwinner).

5

Find any documents that will corroborate your reason for delinquency; for example, award letters for disability payments, medical bills, or proof of SSI (Supplemental Security Income) payments to the debtor.

6

Draft a goodwill letter. The credit bureaus will not automatically remove charge-offs once they're paid. In most cases, if you do not take action, they will remain on your credit for seven years. See Resource 2 for a sample goodwill letter. This letter must describe, in detail, the economic hardship leading up to your delinquency.

7

Make copies of all documents relating to your hardship. Include these in the envelope with your goodwill letter. Send this letter to all credit bureaus reporting the charge-off. See Resource 3 for contact information.

8

Wait for a response. The credit bureaus have 30 days to respond to your letter and 90 additional days to make a decision on your request.