Are you confused about the meaning of a charge-off vs repossession and how each might affect your bankruptcy case? While these terms often appear together, they represent two distinct processes that can affect your bankruptcy case differently.
A charge-off occurs when a lender removes an unpaid debt from its accounting books, typically after 120 to 180 days without payment. Many people mistakenly believe this means they no longer owe the debt. However, you remain responsible for payment, and the lender can still pursue collection efforts or sell the debt to a collection agency.
If you are facing this situation, the experienced debt defense attorneys at Loan Lawyers help you understand your rights and options. Contact us today for a free consultation to discuss your situation.
Can a Charged Loan Be Reinstated?
Once a lender charges off a loan, it typically transfers or sells the debt to a collection agency. You remain responsible for making payments to the new owner. It is worth noting that the charge-off notation may stay on your credit report for seven years, even after payment.
Can a Car Loan Be Charged Off Without a Repossession?
Many of our clients wonder, “Is repossession a charge-off?” Not necessarily. While these events often occur together, a lender can charge off an auto loan without repossessing the vehicle. For example, this might happen if the car’s location is unknown or its value falls below auction costs. However, whether a creditor can repossess and sell the item in bankruptcy depends on your specific situation and the type of bankruptcy you file. A knowledgeable Florida bankruptcy lawyer can help you understand your situation.
Is a Charge Off Better Than a Repossession?
Neither a charge-off nor a repossession will benefit your financial health. That said, each will affect you in different ways. During a repossession, the lender takes your property and sells it at auction. Moreover, a secured creditor can get repossession fees in bankruptcy, but these fees must be reasonable and properly documented. With a simple charge-off, you keep your property but still owe the debt.
Can You File Bankruptcy on Charged Off Accounts?
You must list all debts in your bankruptcy filing, including charged-off accounts. These debts often qualify for discharge in bankruptcy, potentially giving you a fresh financial start. However, the timing of the charge-off can affect your options for keeping your property or addressing the debt.
Questions About Bankruptcy? Ask Loan Lawyers!
It’s understandable to feel confused about charge-offs and repossessions. However, it’s important to know that the answers to your questions are just a phone call away. Remember, you still have a right to seek the debt relief you need. Loan Lawyers has helped thousands of South Florida residents understand and assert their rights and find practical solutions to their debt problems, including credit card debt, medical debt, late mortgages, and more. Our experienced consumer rights attorneys will comprehensively review your financial situation and explain all available options.
Contact us today for your free, confidential consultation. Let us show you how we can help protect your rights and help you achieve the financial stability you deserve.
