How long does it take for credit card debt to be written off?

Most credit card companies write off unpaid debt after a certain number of missed payments, but that’s not the end of the story.

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Credit card debt has ballooned in recent years, with total card balances now exceeding $1.21 trillion, according to the latest data from the Federal Reserve. And, today’s high credit card interest rates, which are averaging above 22% currently, are making it even harder for borrowers to keep up, especially amid the current inflationary landscape. As payment delinquencies rise in tandem, though, many borrowers wonder how long before that old credit card balance is simply written off.

Credit card companies do write off debt, but perhaps not in the way most people imagine. When a creditor charges off your account, they’re not canceling what you owe or giving you a clean financial slate. They’re making an internal accounting decision, one that has significant consequences for your financial future. That process is governed by specific rules and timelines, but once the debt is written off, collectors can still come calling.

So what’s really happening when debt gets written off, and how long does this process take? More importantly, what does it mean for you if you’re struggling with credit card balances you can’t manage? 

Find out how you can take steps to start tackling your high-rate debt today.

How long does it take for credit card debt to be written off?

Most credit card companies write off unpaid debt after 180 days, or roughly six months, of missed payments. The charge-off timeline follows federal regulations that require lenders to remove severely delinquent accounts from their active books for accounting and tax purposes.

When that happens, your credit card account is closed, and the lender records the unpaid balance as a loss. That doesn’t mean you’re off the hook, though. You still owe the money, and the debt can and usually will be sold or assigned to a third-party collection agency.

Once the account is charged off, several things typically occur:

• Your credit score drops: A charge-off is one of the most damaging entries on your credit report and can remain there for seven years from the date of your first missed payment.
• Collections begin: The debt may be pursued by the original creditor or a collection agency, which can contact you through calls, letters or legal action.
• Interest and fees may continue to accrue: Some states allow interest to keep accumulating even after the charge-off, further increasing your balance.

It’s also worth noting that the write-off timeline doesn’t erase the statute of limitations on debt collection. Depending on the statute of limitations where you live, creditors may still be able to sue you for unpaid balances for anywhere from three to 10 years.

Learn more about the credit card debt relief options available to you now.

What happens after your credit card debt is written off?

A charge-off doesn’t end the story. It often marks the beginning of a new, and sometimes more stressful, chapter. Once your balance is written off, the debt is likely to be sold to a debt buyer for pennies on the dollar. That company now owns your account and will attempt to collect the full amount from you.

If you’re struggling to deal with collection calls or you’ve received notice of a potential lawsuit, working with a debt relief company on a solution can be a practical next step. These companies negotiate with creditors and debt collectors on your behalf, often helping you settle debts for less than you owe. You might receive a settlement offer, let’s say, 50% of the balance, to close out the debt. Note, though, that the forgiven portion could be considered taxable income by the IRS.

Working with a debt relief company isn’t your only option, either. There are a few ways to get relief before or even after a charge-off, including:

• Debt settlement: When you pursue credit card debt forgiveness, also known as debt settlement, the goal is to reduce your total balance by arranging a lump-sum payoff for less than you owe. 
• Debt management: With debt management, a credit counselor works with your card issuers to try and lower your rates and fees. You then make one consolidated monthly payment through a credit counseling agency, which distributes it to your creditors.
• Debt consolidation: With debt consolidation, you take out a loan to pay off your existing credit card balances, ideally at a lower interest rate, to lower the interest charges and simplify repayment.
• Bankruptcy: If you’ve reached the point of no return, Chapter 7 or Chapter 13 bankruptcy can offer legal protection and a structured path toward discharge or repayment.

The bottom line

Credit card debt is typically written off after six months of missed payments, but that doesn’t mean it disappears. Instead, it becomes a charged-off account that can haunt your credit for up to seven years and may lead to aggressive collection attempts or lawsuits.

If your debt feels unmanageable, waiting for it to “go away” is rarely the answer. Before your account hits the 180-day mark, or even after, consider working with a reputable debt relief provider to negotiate a lower payoff or create a structured repayment plan. Taking control sooner rather than later can help you avoid the long-term financial damage that comes once your debt is written off.

Edited by

Matt Richardson