charge off

A charge off is an accounting action where a creditor declares a debt unlikely to be collected and removes it from their active receivables.

This typically happens after prolonged nonpayment, often 120 to 180 days past due.

The debt doesn't disappear—it may be sold to collection agencies or pursued through other means—but the original creditor writes it off as a loss for tax and accounting purposes.

The bank charged off the credit card balance after six months of missed payments.