Charge-off Amount on the Past Due Notices
Answer by Randy Carey, BOL Guru Guru Bios
Question: When part of the balance of a loan is charged-off, should that charged-off amount be included in the balance printed on past due notices? Can someone please direct me to some rules regarding partial charge-offs.
Answer: Unless the amount that was charged-off involved a cram-down involving a bankruptcy, the bank is still owed the debt and there would be nothing wrong with continuing to attempt to collect the total amount owed. The charge-off is merely an internal accounting entry and does not impact the amount owed by the customer.
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