If a credit card has been charged off, will it still have to be paid?

Question

I found out my daughter ran up a credit card of mine to a very, very high balance. I thought the card was closed out a long time ago. Now this lawyer is sending me letters saying they are going to sue me for the amount. I ran a credit report from annual credit report.com, and it showed that account was charged off. What is going on with that? My credit is already bad, because of my daughter running up credit cards. I don't have anything they can sue me for, and I draw Social Security. Our home was mortgaged through that Reverse Mortgage program for senior citizens. Since my daughter ran the card up, will she be made responsible?

Answer 1

You might want to check the Statute of Limitations (SOL), the timeframe to bring lawsuit, for your state:  http://www.bcsalliance.com/statute_of_li...  Typically the SOL starts from the last activity or last payment.  

If the debt is beyond the SOL, you can use this as an affirmative defense in court.  If you are served a summons be sure to answer it and show up in court.  

The fact that you have no assets and if Social Security is your only source of income, you are pretty judgment proof.  You may want to point that out to the collector.  They may give up.

Answer 2

Are you prepared to sue your daughter?

Without proof that your daughter stole the money, the credit card company will continue to assert that you owe it.  Even when it's legally charged off, you would receive a 1099-C and have to add it to your taxable income.

You may want to verify that no 1099-C has ever been issued.  

In the absence of a 1099-C, the lawyers probably bought the debt for pennies on the dollar and are trying to see how much you will pay if they simply ask (and threaten).

Answer 3

Charge off just means the original company wrote that money off and sold the account to collections, you can still be sued and if they are threatening you then are probably going to sue. And no if it was in your name you are responsible, looks to me your daughter is very selfish and needs to be taught a lesson. Shame on her for putting you in this situation, she should feel bad. She will only be made responsible if you sue her for the amount.

Answer 4

In most situations it is not worth paying back a debt that has charged off.  They have already ruined your credit report for 7 years (from the day of the charge off).  Paying will not erase the information any sooner.

They could sue you to get whatever they can from you to repay the debt.  They must do this within 4 - 7 years (depending of the state), or they loose the legal ability to recuperate money from you.  Legally, the debt always exist, but the remedies only last for a few 4 - 10 years.  This is called "Statute of Limitations".

Now, if you owe a lot of money, $10K or more, then it might be profitable for them to incurr in the expense of a lawyer + court and proceed legally against you.  

By the way, it is true collectors will phrase their collection scripts to sound like they are lawyers, "this is a legal issue...", etc.  It is a legal issue, but they are not lawyers and may not be willing to sue you.  If they are a serious collection agency, and are telling you they will sue you, they are probably thinking on doing it (it may also mean that unfortunately you owe a lot!).  Ask them directly if they are a lwyer and if they are to sue you.  If they dance the question, they are not serious.  If they give you legal papers from the court, then this is it, you are being sued.

Regarding your daughter, well...  you authorized her.  I don't see you off the hook via this route.  

I have a feeling your daughter spent a lot of money.  If this is true, you may need a lawyer my friend.

Answer 5

A "charge-off" is simply an accounting term meaning that the creditor has written-off the account as bad debt.  It does not mean that you no longer have to pay it.

If you knowingly let your daughter have the card, you are responsible for what she charged on it.  If there is any good news here,  social security cannot be garnished. However, if they take you to court and get a judgement against you, they could freeze your checking account.

Regarding the threats of a lawsuit, you have to keep in mind that a favorite trick of debt collectors is to pretend to be (or work for attorneys) to scare you into paying. This is illegal behavior. If you have any doubts, ask to know the full name of the attorney and his/her license # in the state bar association. If they fail to give you this info, they're bluffing.

If this a real legal threat, contact your local Red Cross for a referral to the nearest free legal aide in your area in you can't afford an attorney.  

Call the debt collector and try to negotiate a settlement....try 40% and go up from there. Get all terms in writing PRIOR to giving them your money. Never give them your checking account #.

Answer 6

when u close a credit card acct, U MUST specifically ask them 2 ALSO close the credit LINE.

Best Wishes!!!