Charge-Off

A charge-off occurs when a lender officially considers a debt uncollectible, usually after the borrower has missed payments for an extended period, typically 180 days for credit cards. This means the lender has written off the debt as a loss for accounting purposes, but the borrower still owes the money. The lender may sell the debt to a collection agency or continue trying to recover it. A charge-off can negatively impact your credit report, making it harder to get new credit, but it does not erase the responsibility to repay the debt.