II'm being sued for 2400 dollars by Kay's jeweler and they put a charge off on my credit report. So why should I pay?
4 attorney answers
A charge off is an accounting function, not a forgiveness of the debt. A charge off is not a cancellation of the debt but a step that helps with taxes.
The creditor can sue you and do its best to collect money from you. If it collects money it can reverse the charge-off but only to the extent it received money.
The reason to pay? Avoid having a judgment on your credit report for 10 years from entry of the judgement.
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A court judgment is a little more serious than an F on a mid-term exam. Judgments live many years and in some states enjoy near immortality, just like a Vampire. And in most states, the creditor is able to send its judgment to local law enforcement to seize assets not protected by state laws called exemptions. For more information, complete a brief survey at www.endgarnishment.com and my autoresponder will send you personalized information. Hope this perspective helps!
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The charge off status on your credit is really going to hurt you. If the debt is paid or discharged through a bankruptcy the status of the debt should change to paid or discharged which will help out your credit a lot.
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"Charge off" doesn't mean you don't still owe the debt. It just means that they sent it to collections, either in house or a to a separate company. If they get a judgment against you they can garnish your wages or bank accounts. You can try calling the law firm they hired to sue you and working out a settlement for a lower amount of money, but you'll probably end up paying something on the debt eventually, unless you file for bankruptcy, that is. But if this is your only debt, that's probably not a good option.