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Charge Off Credit Union Loan

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Mark Cappel
UpdatedJun 5, 2023
Key Takeaways:
  • Charge-off usually occurs between 180 and 240 days from the date of last payment.
  • Creditors may have shorter times to write-off than accounting guidelines recommend.
  • Negotiate with your creditor to repay the loan with terms you can afford.
Can a credit union charge-off a loan if I am less than 90 days late in my payments?

What do you do if a credit union that I used to work for charged off a loan that I was less than 90 days late but yet I was still paying on it? I was trying to get the loan caught up and in February of 2008 I made two payments and went back the next month to find out that the loan was charged off the end of February of 2008? Can they do this if I am still showing an effort to pay?

The creditor can charge off a delinquent loan, regardless of what may be surmised from the debtor's intent. Allow me to define several terms before I answer your question further.

Charge-off (sometimes called "write-off") is an accounting term used by creditors when they move a delinquent account from its accounts receivable books to its bad debt ledger. This usually occurs between 180 and 240 days from the date of the last payment. The fact that an account is charged-off does not mean the debt may not be collected later. The charge-off date also does not correspond to the statute of limitations on collecting a debt, or the date that an entry on a credit record must be removed. All three dates or deadlines are independent of each other and have different meanings.

Because an account is charged off does not mean the creditor lacks a legal right to collect the debt. To the contrary, the creditor may move the account to its own internal collections department, or sell the debt to a third-party collection agency.

A loan is a contract between the creditor and debtor. Under most loan contracts I have read, a delinquency is a delinquency, and there is no requirement that a creditor give a debtor a grace period before considering a debt delinquent. The charge-off discussion above concerns guidelines, for the most part, that banks are creditors follow. A creditor may have a shorter time to write-off than accounting guidelines recommend.


I do not see any violations of law reported in your message. (Readers with more experience in accounting or securities law are welcomed to comment below.) If the creditor sold your collection account, negotiate with it to repay the loan with terms you can afford. Alternatively, go to the debt relief savings center to get a no-cost, no-obligation quote from a pre-screened debt resolution service provider.

I hope this information helps you Find. Learn & Save.



Struggling with debt?

Debt is used to buy a home, pay for bills, buy a car, or pay for a college education. According to the NY Federal Reserve total household debt as of Q4 2022 was $16.91 trillion. Auto loan debt was $1.55 trillion and credit card was $0.99 trillion.

According to data gathered by from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 10% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.

Each state has its rate of delinquency and share of debts in collections. For example, in New York credit card delinquency rate was 3%, and the median credit card debt was $420.

Avoiding collections isn’t always possible. A sudden loss of employment, death in the family, or sickness can lead to financial hardship. Fortunately, there are many ways to deal with debt including an aggressive payment plan, debt consolidation loan, or a negotiated settlement.

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