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How Do I Pay Off a Charged-Off Account?

charged-off account

If you notice a charged-off account on your credit report, it is natural to be concerned about how it will impact your credit score. After all, you still owe the debt, but the account may be closed, or you may have a debt buyer managing it instead of whoever you originally owed the debt to.

Many people wonder how they can pay off a charged-off account, if they even can. There are a few things to remember when it comes to charged-off accounts.

Things to Know About Paying Off a Charged-Off Account

Before you pay off a charged-off account, there are a few things our debt defense lawyer wants you to know.

1. The Debt May be Sold

Often, a charged-off account and debt is sold to a debt buyer. That means your credit report may show a zero balance due to the original creditor. That does not mean that you longer owe the debt, or that it disappears. It does mean that any attempts to pay the debt will go through the debt buyer, not the original creditor.

2. You Can Negotiate the Total Amount Due

Many debt buyers and debt collectors will negotiate with you to make payment arrangements or a lump sum payment to resolve the debt. If you can’t afford to pay the entire debt owed at once, ask them about making payment arrangements. You can also ask them to settle the account for a lower amount. Often, debt collectors will allow you to make a few reasonable payments to total a percentage of the original debt, and will write off the remaining balance.

3. Always Verify the Debt

Just because someone says you owe a debt doesn’t necessarily mean that is the case. There are many people who suffer from identity theft and fraud who find themselves owing debts they know nothing about. Always ask the debt collector to provide documentation of the debt, that you are responsible, and that they own it. Never make payments to a debt collector if you believe you do not owe the debt.

4. Paying Off a Charged-Off Debt Impacts Credit Over Time

Paying off a charged-off account will not have an immediate impact on your credit score. Your credit score is calculated using a number of factors, including credit history, overall payment history, and the number of accounts. Paying off a debt is a great way to boost your score, but it may take months before you see any real change.

5. Beware of Promises to Delete a Charge-Off From Your Credit

Some original lenders and debt collectors allow you to send a “pay for delete” letter asking them to delete the charge-off from your credit report in exchange for certified funds. Beware of this tactic, as it can be considered a “black hat” tactic. Some lenders actually respond negatively to this.

If, after a period of time, you pay the charged-off account and it is still on your credit, contact the credit bureaus to discuss having the item removed. Be very cautious with any other companies who promise to delete items from your credit for a fee. There are a lot of scams out there.

6. A Debt Defense Lawyer Can Help

If you have a charged-off account you want to pay but aren’t sure how to go about it, a debt defense lawyer can help. A debt defense lawyer has many tools in their arsenal to help negotiate debt payments, settle accounts, have debts dismissed, and manage debt collection lawsuits.

Having a lawyer on your side can help ensure your rights are protected. It also ensures that you have the best options possible for debt relief.

Contact Daic Law for Debt Defense Help

If you are facing a charged-off account, a debt collection lawsuit, or want to speak with a lawyer about your rights as a consumer, contact Daic Law. We help clients understand their legal rights and options when debt becomes overwhelming or impossible to manage on your own.

Schedule a free consultation with our debt defense lawyers by calling us at 877-893-6040, or by emailing us at

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