A charge off happens when a debt remains unpaid for a certain period, typically 90 to 180 days delinquent. The creditor writes off the debt for accounting purposes, but this does not mean the debt is forgiven.

Here's what happens after a charge-off:

• The debt still exists. The creditor may continue collection efforts, including contacting you and possibly suing you.
• The debt may be sold. The creditor may sell your debt to a debt buyer, who can then attempt to collect and take legal action against you.
• Your credit score may drop. A charge-off stays on your credit report for up to seven years, making it harder to get credit in the future.