The short answer is yes, charged off accounts are still valid legal debts. Credit card companies often sell their old “charged off” accounts to collection agencies for a small percentage of the amount owed. A charge off just allows the company to take the loss as a matter of accounting.
Once the account is charged off, the lender will still sell the account to a collection agency, and this may happen right away, or much later on. Therefore, even if you see that a debt has been charged off on your credit report, and even if you have not heard from the company or a collection agency for a long time, you still may face collection efforts.
Old accounts may be legally uncollectible, however, under the statue of limitations. Determining when the statue of limitations has run, however, is far from easy. First, the answer depends on which state’s law we are talking about. Are you dealing with Colorado law for this debt, or the law of the state in which your credit card company or other creditor is located? Second, we need to determine when the statue of limitations had started to run for this debt. The various state laws usually say that the statue starts to run on the date of the last “activity” on the account. This can mean many things, but is usually the date of the last payment on the account. So, the determination of whether you still owe a particular debt can be complicated.
If you are worried about old debts coming back to haunt you, please call the Law Firm and I will help you make a determination. A part of any decent bankruptcy lawyer’s job should be to decide if a bankruptcy is actually necessary for the client.