Did you know, whether or not you charge-off your credit card, you may still be responsible to pay fees and fines associated with the debts in the account? This is because the bank that you were using still wants to be paid, whether or not your card was charged-off. The card issuer has the right to report your account’s statues to credit reporting bureaus each month, which means that you could still end up in deep water. When you applied for your credit card, you probably signed a cardholder agreement with the bank that issued the card. This means that you signed a contract with terms that are enforceable even after the account has been charged off.

If you don’t charge-off your account, then the bank will probably do it for you, as long as they have not received a payment from you in the past 180 days. When a bank “charges-off” a card, they are simply moving the account from an asset to a liability. This means that they are saying that they have doubts you intend to pay back your debt, and they may start sending collections calls your way. The bank will still hope that you will voluntarily pay back your account, but may start sending phone calls and e-mails to remind you that you have an overdue balance that has been severely neglected for some time. All of this to say, the charge-off card does not affect your card-holder agreement, and you will still need to pay the money that you spent using the credit card. The account will probably be closed by the card issuer when you fall gravely behind on payments, but the contract will still exist.

Any fees that were written into your cardholder agreement that you signed with the advent of the account are still issued. Any late fees or over-the-limit fees that were in your agreement will still be applied to your account. This is especially true if you are neglecting payments or making them late. As well, if your balance is more than the credit limit on the account, then you will be issued penalty costs, which will zap more money from your already low balance. The debt may accumulate to a negative balance that is more than you can bear. The interest charges that you signed into action on your agreement will also persist, and be added to your account each month. The interest can accumulate to astronomical levels on top of the base amount that you overcharged.

In most cases, your penalty interest rate will probably climb to about 29 percent. You will also be billed for any legal fees and court costs that were submitted by the bank regarding your credit account. The account won’t actually drop from your credit report until 7 years from the date that the account was charged off. Yet even when the account drops, you won’t be able to move on without debt. The account will often be closed and creditors will arrive full force. You may be sent to court over failing to pay your dues, and will need to structure a repayment plan or go bankrupt. If you don’t, you may be at risk to foreclosure or even jail time.

If you are worried about a charge-off account at present, there’s a chance that you are only months away from having creditors come knocking. In most states, the banks must wait at least 3 years before they can start legal action against a customer regarding a surmounting debt. At this point, it may seem impossible to find a way to pay. Thankfully, you have an option. Bankruptcy often sounds scary, but it can actually be the best way to eradicate all of your debt and satisfy your accounts. Talk to a bankruptcy attorney today if you want more information about your charged-off accounts and how to eliminate your debt!