Credit card query.Q My credit report shows that a creditor An individual to whom an obligation is owed because he or she has given something of value in exchange. One who may legally demand and receive money, either through the fulfillment of a contract or due to injury sustained as a result of another's Negligence has written off what I owe them as a bad debt expense. Now, I've received a letter stating that a new firm has purchased my account and wants to collect. If my debt has already been written off, do I still owe? --Name withheld A Absolutely. A charge-off Eliminate or write off. The term charge-off is used to describe the process of removing from the records of a company something that was once regarded as an asset but has subsequently become worthless. enables the firm that you owe to get a tax break by claiming a loss; it doesn't exonerate you from the debt. In fact, it simply lets future creditors know that you have a debt that you have failed to satisfy. And contrary to popular belief, the charge-off does not just disappear after seven years. "[A creditor] can upgrade a debt three times every seven years, so a charge-off can actually stay on your credit report for 21 years," according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Luther Gatling, president and founder of Budget and Counseling Services (800-475-1994; www.buccs.com). Sometimes, as in your case, a collection agency or other firm will purchase an account receivable account receivable Any amount owed to a business as the result of a purchase of goods or services from it on a credit basis. Although the firm making the sale receives no written promise of payment, it enters the amount due as a current asset in its books. (your debt) for a discount in hopes of collecting the full amount. This only means that the firm you owe has changed but the amount you owe remains the same. If you pay the debt, which is the only way to positively influence your credit standing, "ask for a letter stating that the debt is satisfied in full and that is sent to all of the credit bureaus," advises Gatling. "[The charge-off] still stays on your credit report for seven years but it will also show the debt was paid." --Monique R. Brown Mail your consumer questions to Ask Your Advocate, BLACK ENTERPRISE, 130 Fifth Ave AVE Avenue AVE Average AVE Alta Velocidad Espanola (train between Madrid and Seville) AVE Alta Velocidad Española (Spanish: High Speed Train) AVE Audio Video Entertainment AVE Advertising Value Equivalent ., New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , NY 10011, or send an e-mail to brownmr@blackenterprise.com. |
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