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Thomas F. Miles, Attorney and Counselor at Law
152 West Park Ave
El Cajon, CA 92020
Telephone: 619-631-4833
Toll-Free: 866-471-0416
Fax: 619-588-6200

El Cajon Law Office

NACBA | National Association of Consumer Bankruptcy Attorneys

Unmanageable debt and credit card charge-offs in California

Lenders tend to classify unpaid credit card debt in several different ways. For example, when a California resident has unmanageable debt and is unable to pay it off for a long period of time, credit card companies may categorize it as a charge-off. Charged-off credit card debt is considered to be irretrievable and uncollectable by credit card companies.

Charge-offs relating to credit cards remain on the credit reports of Californians for a time period of seven years following the date of the charge-off. This means that a debtor will be negatively affected by their failure to pay for a very long time to come and it will have seriously negative consequences for the debtor. Some see the percentage of state-wide credit card debt that is charged off as an indicator of the financial well-being of a particular state.

Second quarterly reports for 2013 indicate that certain states have a much higher level of charged-off credit card debt than other states. For example, California ranked number five out of all the 50 states, having the fifth highest percentage of charged-off credit card debt. The 2013 second quarter showed that California's charged-off debt was 4.35 percent. In fact, California has ranked in the top ten states for highest levels of charge-offs for the last three years.

Unmanageable debt -- be it credit cards, mortgage payments or car loans -- can be a significant burden for California residents to bear, especially if they are experiencing financial difficulty. The problem stems from the often difficult and/or impossible task of paying off debt that is simply unmanageable. Legal strategies exist to help individuals in this kind of situation in the form of debt management, re-organization, bankruptcy and other strategies. These strategies can help to free California residents of the burden of burgeoning debt, which can wreak havoc on one's emotional, financial and physical well-being.

Source: Yahoo Finance, The States With the Most Charged-Off Credit Card Debt, Christine DiGangi, Oct. 14, 2013

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