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Charged off debts are still collectible...

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  • Charged off debts are still collectible...

    is this really true? found this on your sister site


    Charged off debts are still collectible...even years later!

    The IRS allows creditors to charge off debts that have become worthless. The rule is called the "Specific Charge-Off Method". In a nutshell, this rule allows creditors to take a loss on their income taxes when a debt they are trying to collect becomes worthless. Companies do not actually have to go to court to prove the debt is uncollectible and they can still try to collect the debt at a later date. If they are successful in collecting the debt (or any part thereof) they must claim it on their tax return in the year collected.

    Quite often, creditors sell accounts they deem worthless (or not worth their time and expense) to third party debt collection agencies called Junk Debt Buyers.

  • #2
    Re: Charged off debts are still collectible...

    It is correct.

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