Charged off debt is the step taken by your creditors when you are not able to settle off or continue on with your regular bill payments. But this is not as bad as creditors make it out to be. Although it should be avoided to keep a healthy credit score rating, it is not the end of the world.
What exactly happens when your account is charged off and why is this even used by your creditors and bill collectors? As dictated by accounting standards, companies write off your account to zero value in their books and mark it as bad debt. This usually happens from three to six months after non-payment on your obligations. They take this course to reflect the account as an amount that can no longer be collected – but it does not mean that they will totally put down efforts to collect the debt.
There are a couple of things to remember when faced with the predicament of having your account charged off. The first one is to keep a cool head and not let the situation dictate unnecessary actions on your end that could complicate the situation further. Communicate with your creditor right away to discuss the minimum monthly payments you need to see through to keep your account current. As much as possible, never give your checking account details and stick with the monthly payments. Although most agreements start off with verbal engagements, always follow through with a black and white version of what was discussed. Make sure the agreement is binding by having it signed by all concerned parties and notarized to express intent to participate.