Does interest accrue on a Charge Off?

Answer:

As discussed many, many times here; Charging off or Writing off a debt is a required accounting entry. It is how the one you stiffed, shows the asset it was to receive (the money you we're to pay), and it expected or had already recorded as income, will not happen, and instead it has an expense, or a loss.

It does not forgive the debt, relieve the debt, excuse the debt, say they won't try to continue collecting the debt, etc...it just says that it is a bad debt.

For the company doing the accounting, one of the points of charging off an account is to say it is no longer a productive asset.....so they cannot accrue interest on their books...because its to a dead beat and it can't reasonably be expected to be received. (Also, under many circumstances, they would have to pay taxes on just recording the accrual of interest they expect to earn. They wouldn't mind paying the tax, if they actually might earn something).

The one who owes, still gets charged interest on the debt they still owe. they also normally get charged all the costs incurred in collecting the debt. Accounting entries done by the one they owe money to does not change any of their obligations.