Q. Can I Dispute a Charged Off Account?
A. When a consumer has a debt that is overdue over 180 days, or six months, the lender must declare that debt as a charge-off. This means the company or financial institution is taking a loss, and filing that loss on its federal income tax. The company did not get paid and so has lost the income it previously depended upon when they created their yearly budget.
Typically, what happens next is that the debt is sold to a debt collector, most often an agency, as part of a package of “repackaged” debts owed this company. Your debt is now lumped in with a bunch of other consumers who defaulted on loans, credit card, and mortgages. It is easy to get lost in the crowd and very hard to remove yourself from the pack.
The only notice you might receive is that of a negative update on your credit report. If you are diligent in checking your credit report every week, you will see it. Most consumers are not, and only check it if they have been denied credit. This will undoubtedly affect your credit rating.
You are not able to dispute the sale of your debt to the new collector, but you have the legal right to question the charge off, if in fact, you have paid the debt in full. If you have gone over the above referenced 180 days, however, there is nothing you can do.
The folks at Lexington Law are able to help you with all your credit inquiries and may be able to help you with a charge off that you feel is unwarranted or was erroneously placed on your credit report. Although you are legally protected and can question the charge off yourself, the attorneys at Lexington Law are aware of the red tape and can maneuver the ins and outs of the system.
