What does a charge off mean? Does it mean that the creditor won’t sue me anymore? Or, will they sell the account to a third party collection agency in order to receive a handsome commission over the unpaid debt? Or, does this mean that the collection agency can sue me and receive a judgment against me?

One of my friends told me that the original creditor needs to sue me and not the third party. And moreover, if they have charged it off, they are not going to sue me.

Again, how long normally a creditor waits before they charge off any debt? I’ve some 160 days past due. Does it mean that they are not going to charge it off?

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A charge off means that a creditor doesn't believe anymore that he/she will be able to recover the debt amount from you and hence sells it to a third party collection agency. This means that the original creditor is probably not going to sue you but the collection agency keeps such a right. Often, collection agencies buy debts before the statute of limitations period ends. Therefore, they can easily pursue a judgment against you.

If you have a payment 160 days past due, you can easily assume that the debt has already been charged off. Make a payment if you can, otherwise your credit score may have a blow.


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