Charge-Off
Also called: charged off, written off debt
A charge-off is the lender's accounting decision to write a debt off as a loss, typically after 120–180 days of non-payment. It does not cancel what you owe. The balance is usually sold to a collections agency for a few cents on the dollar, and the charge-off sits on your credit report for seven years as one of the most damaging entries there is. Because the buyer paid so little, charged-off debts are often settled for a fraction of face value.