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Q:
If a creditor has "charged off" a credit card account why is a collection agency calling looking for payment?

If a creditor has "charged off" a credit card account why is a collection agency calling looking for payment? Also, shouldn't the interest then be stopped if the account has been charged off? Thanks. -Tina

Dear Tina,

I realize that credit terminology can sometimes be confusing. The term "charge off" only means that the creditor has internally reclassified your account from a profitable account to an unprofitable one.

If the debt hasn’t been paid, it is still owed. The amount of interest they can charge should be outlined in your original contract with the creditor. If it is not outlined in your contract, it is dictated by state law.

I recommend you make arrangements to pay the account. A paid charge off always reflects more positively than an unpaid charge off. If you need help, MMI credit counselors are standing by at 800-432-7310. Or, you may set up an appointment by filling out an online credit counseling form.

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