Answers.com > Wiki Answers > Categories > Business & Finance > Personal Finance > Debt and Bankruptcy > Should you file bankruptcy if most of your debt has been charged off?

Should you file bankruptcy if most of your debt has been charged off?

In: Debt and Bankruptcy [Edit categories]

Answer:

Filing bankruptcy

I may be wrong on this, but my understanding is that "charged off" simply means the creditor has written the debt off (as in written it off as a loss on their taxes, or turned it into their insurance company as a bad debt, etc.) but in no way affects the collectability of the debt. I suspect if they later collect on a charged off debt, they have to claim the money they receive as income on their taxes since they wrote it off earlier. I may be wrong about this though... I definitely don't think that "charged off" means "forgiven," though. Please note that nothing in this posting or in any other posting constitutes legal advice; this is simply my understanding of the facts, which I do not warrant, and I am not suggesting any course of action or inaction to any person.

Contributor:

Neila222

First answer by Neila222. Last edit by Shayne54. Contributor trust: 3 Question popularity: 248 [recommend question].

[report abuse]

Can you answer these Debt and Bankruptcy questions?

	Can you lose your house if you file for a chapter 7?	Answer it!
	How soon after a car purchase can you file bankruptcy?	Answer it!
	Can you open up new credit after the chapter 7 has been discharged?	Answer it!
	How do you release lien amount?	Answer it!
	Does bankruptcy void a judgement?	Answer it!

Relevant answers:

Should i file for bankruptcy on my charged off accounts?
Write offs are still valid debts by you. Write off is only a required accounting entry by the creditor so his records reflect the bad business and loss of expected income or asset. It does not in any...
When a debt is charged off will it effect bankruptcy?
"Charged Off" is an accounting term applicable to the accounting for (that is the charging the loss that is being taken against income - reducing income) by the one who gave the credit. As it is...
Can debt collectors collect on a debt after it has been charged off?
The term "charge off" indicates the original creditor has removed the debt from their balance sheet as uncollectible from the borrower. This is misleading however, as the debt may remain it must be...
Should you file bankruptcy if you are 12000 in debt and your house has been foreclosed on?
Maybe. The foreclosure alone is not sufficient grounds to pre-emptively file bankruptcy. Normally it is a good idea to wait and see if the bank that foreclosed ever comes after you for any deficiency...
Your debt has been written off should you pay it?
"Write offs" sometimes called "charge offs" do not mean a debt is no longer valid and collectible. The term is used to allow the creditor to remove the account from normal prescribed collection...