Credit Advice

Have a question? Have advice to share? The combined knowledge and experience of everyone in the Credit Karma community can help you. Enter your question or help others below to get started!

Question

Posted in Student Loans
Profile Image

Question By
Glory17

0 Contributions
0 People Helped
How I fix that?
I have an old student loan account that says it's closed but derogatory. In the notes it says "Charge off as bad debt and Profit and loss write off." does that mean i still need to pay that balance?

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW
All Responses

Result 1-1 of 1Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next
Top Contributor
30 Contributions
66 People Helped

Charge Off

Charge off means the lender has taken a loss on your debt.  Often, lenders will do this in order to reduce taxes as lossed income when you do not pay them what you owe them.  They have "written it off".  However, be aware, this often means that they have sold your debt (for pennies on the dollar) to a collection agency.

Your question, does that mean I still need to pay the balance.  The short answer is legally yes.  You are still "on the hook" for the debt unless it has surpassed the statute of limitations.  So if it has not, whichever collection agency bought the debt can still attempt to collect.  Sometimes collection agencies will attempt to sue for the debt, garnish wages, or bank accounts.  So you should be wary if you account was sent to collections.

There are ways to dispute collection agencies, however, that is a topic for another post.  I just don't want you to think because it says charge off, that you are free and clear.  Also, when dealing with collection agencies, be careful.  Not all of them are dirty, but a large majority of them will skirt laws and make less that truthful statements.  Do your research BEFORE dealing with them.

Result 1-1 of 1Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW

Reply to this Question

Write your response:
Enter Your Comments

The Credit Advice pages of the Site may contain messages submitted by users over whom Credit Karma has no control. Credit Karma cannot guarantee the accuracy, integrity or quality of any such messages. Some users may post messages that are misleading, untrue or offensive. You must bear all risk associated with your use of the Credit Advice pages and should not rely on messages in making (or refraining from making) any specific financial or other decisions.