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    ckinganswers's Avatar
    ckinganswers Posts: 9, Reputation: 0
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    #1

    Jan 30, 2007, 10:06 PM
    What does "Charge Off" mean?
    A collections/attorney firm filed for judgement against me. It had been in the hands of another collections agency before this attorney. When I called the first collections agency, they told me the debt was "Charged Off" . That it was sent back to the original creditor. When I called the original creditor, (he CC Company) they would not talk to me and kept sending me into an automated voice system for some "Attorney something Network". I left messages there and got nowhere.

    What exactly does "Charged off" mean? That they sold the debt and took a tax deduction? Can anyone tell me the difference between Assignment, negotiation or Novation?

    Thanks.
    excon's Avatar
    excon Posts: 21,482, Reputation: 2992
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    #2

    Jan 31, 2007, 06:32 AM
    Quote Originally Posted by ckinganswers
    What exactly does "Charged off" mean? That they sold the debt and took a tax deduction? Can anyone tell me the difference between Assignment, negotiation or Novation?Thanks.
    Hello cking:

    Charged off means that the original creditor is not pursuing collection. I'm sure they'll take a deduction on their taxes. Why shouldn't they, and why do you care?

    You can always look those words up in a dictionery.

    excon
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
    Computer Expert and Renaissance Man
    		  
    #3

    Jan 31, 2007, 07:05 AM
    Yes Charged Off, means that the debt was charged off as a loss against income for tax purposes. The debt may have then been sold to a collector for pennies on the dollar.

    The WEB has many sites where you can research those terms. Sometimes context is necessary to define a term. Those three terms are very different things and really can't be compared. Assignment is when the responsibility or ownership of something goes to another party. Negotiation is when 2 or more parties agree on terms for something. Novation is when an obligation or party to a contract is replaced with a new one.
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