# Charge-Off

*Borrowing & Credit — Finicade finance glossary*

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.

**Also known as:** charged off, written off debt

**Related terms:** [Delinquency](https://finicade.com/glossary/delinquency), [Debt Collection](https://finicade.com/glossary/debt-collection), [Credit Report](https://finicade.com/glossary/credit-report), [Defaulting on a Loan](https://finicade.com/glossary/default-credit), [Debt Settlement](https://finicade.com/glossary/debt-settlement)

Source: https://finicade.com/glossary/charge-off