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Credit Cards

Posted by cwinfordfinancial@gmail.com on September 22, 2012 at 1:05 PM

 

Question: I have credit cards on my credit report that have a balance due but it say accounts charged off. Do I still need to pay the credit cards off if its days charged off on my credit report?

 

Response:

These charge offs will remain on your credit for 7 years. It will have an affect on your credit score until it falls off.

 

If you plan to purchase a home, you may be required to pay them off. It depends on the lenders requirements.

 

When a creditor charges off more than $600 of your debt, you will probably receive a Form 1099-C - (Cancellation of Debt) at the end of the year to file with your taxes. This has to be reported as income to you which will increase your tax liability. Publication 4681 of the IRS provides some exclusions situations where you may not have to increase your tax liability as a result of this debt cancellation.

 

Also, your credit score is determined based upon the information on the report at the time the credit score is being requested.

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