Glossary · Collections & your rights

Charge-off

When a lender writes a defaulted loan off its books — usually the moment it’s sold to a debt buyer.

What "charge-off" means

A charge-off is an accounting step: after a loan goes unpaid for a set period (often 120–180 days), the lender declares it a loss and removes it from its active books. A charge-off does not cancel the debt — you can still be pursued — but it usually marks the point where the account is sold.

That is why the entity contacting you about an old tribal loan is often a debt buyer, not the original lender. A charged-off, sold balance is also frequently the weakest to collect, especially if the underlying loan was void in your state.