by footloose » Fri Jan 28, 2011 08:23:52 PM
Well...............................Monty, that's not entirely correct. True, when a creditor "writes off" a debt, they remove it as an Asset (Account or Debt Receivable ) from their Balance Sheet and transfer it to their Income Statement as an Expense ( Bad Debt ). However, your understanding of this "written off" debt is incorrect.
Quote "Yes, it can be collected if its within the statutes of limitation period." This statement makes no sense at all. Why would a creditor "write off" a debt that is within the limitation period when it can be pursued through the legal system, a judgment obtained and enforcement procedures enacted. If this was the case, 99% of collection agencies and debt buyers would be out of business and cease to exist. I don't see that happening anytime soon.
Just because a debt is "written off" by a creditor doesn't mean that it disappears. The debt is still valid and a creditor, collection agency or debt buyer can pursue the collection of this debt until the debtor is finally resting in his "underground condominium" ( grave ). The debt may have gone beyond the SOL but that does not mean that it's uncollectable.