How to Deal With Charge-Off Credit Cards

If you've had a credit account "charged off," it is essentially the point where the original creditor decides to count your credit as a loss and removes the debt and you from its active list of customers. Charged off credit cards will be marked as such on your credit report and can greatly hurt your credit and therefore your ability to borrow. In some cases charged-off credit cards can lead to civil suits. Luckily there are ways you can deal with your charged-off cards that will satisfy the original creditor and help you in the long run.

Instructions

Deal with the Credit Card Company

1

Call the card company directly; don't deal with the collection agency at first. Many card companies are willing to deal directly with past-owed balances even after they've been written off.

2

If a collection agency has placed a negative remark on your credit report, you can have that remark removed if you get the original creditor to accept payment for the past-due balance. When you are able to pay off the debt to the original creditor, you need to send the proof of payment to the collection agency handling your account and ask it to remove the debt from your credit report. In some cases you can also have the original creditor contact the collection agency on your behalf.

3

Send all payments, if not made over the phone, via certified mail with a signature required, this ensures a paper trail is created for your payment. Use a check or certified check; never send money orders unless you have a proof of payment tracker on the money order. You may also be able to pay your debt online; this is dependent on each company.

4

Save all of your records when dealing with the card company, especially if you are in the process of resolving the issue with your card company.

Deal Directly With Debt Collection Agencies

5

Pay the amount owed in full, but before paying ask the debt collection agency to send you a notice in writing that says that it will mark your account as "paid in full" after the full amount is paid. Do not pay until you have this written notice from the collection agency. "Paid in full" simply means that you have paid the full amount as listed on your credit report or as listed by the credit collection agency.

6

Settle your account by asking for a percentage off the amount owed. You can usually receive between 25 and 50 percent off--in some cases even more. Remember to ask for a notice stating that if you pay X amount of dollars before a certain date that your account will be marked as "settled in full." Do not send money until you have an agreement in writing. "Settled in full" simply means that you have settled the account for less than originally owed, and the account has been closed.

7

Ask for a credit report removal if there are any inconsistencies on your report. If any info is incorrect, such as the date the card was opened, the months of nonpayment or any other info, explain those circumstances to the creditor. Tell it you would be willing to forget those inconsistencies and not file a dispute if it would be willing to remove the remarks from your report. To even think about requesting a removal you'll need to be willing to pay the money owed in full.