Bad credit card debt destroying you? You can get help for bad credit card debt and eliminate it legally.
Bankruptcy is one way you can eliminate your debt. Sometimes it seems to be the only solution to getting help.
By negotiating credit card debt, you can also eliminate the debt. You can opt to pay it off at pennies on the dollar or you can wait and see what happens with the collection process.
Credit card lenders many times are divisions of big banks, the very recipient of the government bailout funds. Accounting rules used by the federal regulators impose the requirement that unsecured loans, like credit card debts, be charged off when six months old. Default begins when you stop paying your payments and the payment due date passes. At six months, the loan becomes worthless on the books of the lender.
Charged off means the loan is worthless, not that you do not owe the debt anymore. While the loan may be worthless on their books, it is still collectible. What normally happens is that the company will attempt to collect the debt but more likely sell the debt at a very significant discount.
The debt is usually not collectible from most people at this point. Homesteads are exempt in most states and most personal property is also unavailable for collection efforts. Even with the new bankruptcy laws, particularly if a business failure is involved, most people are eligible for Chapter 7 filing, meaning they are basically judgment proof. Retirement plans, and many long term retirement investments are intentionally not subject to creditors.
After a debt is sold, many times multiple times, the records may be, and likely are, missing from the files. Without those records, it would be very difficult to collect on the debt. To defend an action, an experienced attorney, experienced at defending debt collection cases is a must.