A charge-off is the declaration by a creditor (usually a credit card account) that an amount of debt is unlikely to be collected. This is an internal accounting designation designed to give the creditor a tax exemption on the debt. Often, these charged-off "bad debts" are then sold to collection agencies.
A charge-off does not free you, the debtor, of having to pay the debt. The debt remains legally valid, and the creditor still has the right to collect the full amount so long as it is within the statute of limitations period.
If you are contemplating filing for bankruptcy, consult with a bankruptcy attorney before making any payments.
Otherwise, it would appear that there was a lawsuit filed against you but you were never served with the summons and complaint. Your recourse would be to have an attorney file a motion to set aside default and vacate default judgment pursuant to Code of Civil Procedure section 473.5.
However, if you agree you owe the debt but just can't afford to pay it, and want to prevent or limit wage garnishments and bank levies, you may wish to consider filing a Claim of Exemption with the Sheriff.
Frank W. Chen is licensed to practice law in the State of California. The information presented here is general in nature and is not intended, nor should be construed, as legal advice. This posting does not create any attorney-client relationship with the author. For specific advice about your particular situation, consult your own attorney.
They can, if they served you with a summons & complaint, you didn't respond, and the company obtained a default judgment. Could you provide more facts to help us? Were you served? Was there a suit? If you were not served, an attorney may be able to file a motion to set aside the default judgment.
To discuss this answer with me in more detail, please call (805) 244-5291 or email me at firstname.lastname@example.org. This answer is intended to provide general information only. It does not create an Attorney-Client relationship, nor should it be construed as legal advice or an opinion on specific situations. Eric D. Ridley is only licensed to practice law in California.
You should go directly to a bankruptcy attorney. The charge-off doesn't change anything for you, only for the creditor for tax write-offs. A bankruptcy filing would halt the levy and unfreeze your accounts, and it might even allow you to recover anything taken within the past 90 days.
You can see if there has been a case filed: http://courtindex.sdcourt.ca.gov/CISPublic/enter
As other counsel pointed out, charge off doesn't get rid of the borrower's obligation to repay the debt. The charge-off simply means the creditor realized you won't pay in a timely fashion.
A charge-off just means that the debt was sold to another creditor/collector who will come after you now for payment. The charge-off did not make your debt disappear, you now owe the new creditor/collector. They apparently have a judgment because they are levying your bank account.
It may be time to consider filing that bankruptcy to get rid of this debt. I would be glad to give you a free consultation. Call me Monday at 619-702-5015 or e-mail me at email@example.com or visit my website at www.farquharlaw.com.