Finance
A Mississippi borrower's credit report shows a 'charge-off' from 4 years ago. A charge-off means:
AThe debt was paid in full
BThe creditor wrote off the debt as uncollectable on their books, but the borrower may still legally owe the debt✓ Correct
CThe debt has been forgiven by federal law
DThe debt's statute of limitations has expired
Explanation
A charge-off is an accounting action by the creditor — they've written off the debt as a loss on their books. However, the debt typically remains legally owed by the borrower and can be sold to collection agencies. Charge-offs appear on credit reports for 7 years and significantly negatively impact credit scores.
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