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Record Retention on a Charged Off Loan

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Question: 
How long should we retain the documents on a charged off loan, and when can it be deemed worthless? What needs to be done when it is deemed worthless?
Answer: 

State rules often address retention, so I cannot speak to that. As to a debt being worthless, the best guidance I would refer to is the IRS 1099-C, which you'll submit when you haven't been paid in 3 years, haven't tried to collect in the last year, and the debt is $600 or more.

First published on BankersOnline.com 02/27/06

First published on 02/27/2006

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