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Charge Off Credit Union Loan

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Mark Cappel
UpdatedJun 11, 2024
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.



Did you know?

Mortgages, credit cards, student loans, personal loans, and auto loans are common types of debts. According to the NY Federal Reserve total household debt as of Q1 2024 was $17.69 trillion. Housing debt totaled $12.82 trillion and non-housing debt was $4.88 trillion.

A significant percentage of people in the US are struggling with monthly payments and about 26% of households in the United States have debt in collections. According to data gathered by from a sample of credit reports, the median debt in collections is $1,739. Credit card debt is prevalent and 3% have delinquent or derogatory card debt. The median debt in collections is $422.

The amount of debt and debt in collections vary by state. For example, in Illinois, 26% have any kind of debt in collections and the median debt in collections is $1485. Medical debt is common and 14% have that in collections. The median medical debt in collections is $641.

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.