Charge Offs - What They Are and How to Fix Them
By Chane Steiner

Chane Steiner

Level: Basic PLUS

Chane Steiner is the president and founder of AAACreditGuide.com, the credit repair authority site. His site has helped many people repair their credit and get ... ...

Creditors use the term charge off to write off debt. After a period of time where no payment has been made on an account, (usually 180 days), creditors write it off as a loss and send the account to a collection agency.

After the account has been sent to a collection agency, the creditor usually stops charging interest. The reason for this is that they would have to report the account as income on their income taxes, if they stop charging interest they can just write it off.