What are Charge Offs? and How do they Affect you?

I forgot to state in my question that I live in California. I am reposting the question since it did not get answered.

I have several questions I hope you can answer. Due to circumstances beyond my control, I am behind in several credit card/dept store card payments. One large one is threatening to "charge off the account to bad debt". What does this mean? I can't even afford to file for bankruptcy which is why I haven't done so. I live on a small SSI check. Once this acct. is "charged off", what will the credit card co. do? can they sue me? attach my bank acct? I have no assets other than a 10 year old car and a mobile home which I live in but is owned by the bank. I have kept that payment up so I can have a roof over my head.

2nd part is: I have a social security case that is going to a remanded hearing. If I were to win that and get back pay, could these companies get it? or would I have to pay the debt if I filed bankruptcy after getting this money? Also, I have an attorney suing an insurance company for bad faith after terminating ltd benefits. If I won something from that case, could the creditors get it? Just from my questions I am sure you can get an idea of the problems I have been thru this year!

[JETX]

Q1) One large one is threatening to "charge off the account to bad debt". What does this mean?
A1) This means literally what it says, the creditor will report your debt as an uncollectible debt ("charged off" against the creditors 'books').

Q2) Once this acct. is "charged off", what will the credit card co. do? can they sue me? attach my bank acct?
A2) Their decision to 'charge off' doesn't affect the debt or their options (it is solely an internal adjustment to their records). After 'charge off', they could still decide to sue you and after getting a judgment, could garnish your checking and savings accounts. [However, based on your description, it would be unlikely since your current assets would probably not justify the cost. KEY word here is 'current'.]

As to your '2nd part'.... yes. Any assets that you receive could warrant the creditor to re-evaluate his decision regarding your 'current assets'.

Now finally, I hope that you are successful in your attempts to recover fudns from the social security or insurance issues. If you do, I would hope that you 'stand up' and accept responsibility for your debts and pay them!!! Why would you think that you are 'special' and should be 'exempt' from your debts if you have seizable assets???

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Steve Halket
Judgment Recovery of Houston
JRS.Houston@excite.com
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This is my PERSONAL OPINION and is not legal advice! Consult your local attorney for your specific situation and laws!

Actually Mr. Halket, I was hoping that one of my insurance cases would come thru so that I could pay the obligations and that is what I have been telling the creditors but could give them no guarantees. Unfortunately this stuff moves very slow. But they will not hold on any longer (it has been 8 months) so it has forced me to file a chapter 7. I don't want these accounts gathering up more interest for a year or more and having to pay these people double and triple and maybe more. So the chapter 7 will be the end of dealing with any of them at this point.