Maybe, but there's no hard and fast rule about when or why a bank might "charge off" your credit card balance.

Under typical conditions, most banks classify an unpaid balance as bad debt after a borrower misses four or five consecutive monthly payments. Some lenders will also shut down an account when a borrower misses four or more payments over the course of a year. Although banks can reduce their tax burden by writing down bad debt, they can salvage more cash by selling the right to collect a charged-off balance for pennies on the dollar.

It's a curious paradox that puts your credit score at risk. Technically and contractually, you might not really owe a debt buyer anything. However, as owners of the "paper" you signed with the original creditor, debt buyers can use an arsenal of tactics to get paid. Even if debt collectors don't scare you, the negative impact on your credit report can result in higher insurance premiums or reduce your chances of getting selected for a job interview. Getting your balance "charged off" almost never means you're off the hook.

In recent years, banks and debt buyers have dropped their threshold for taking consumers to court over unpaid credit card balances. Borrowers who ignore summons or avoid appearing before a judge often lose cases by default. When that happens, borrowers can end up on the hook for their original balances, plus legal fees, penalties and interest.

If you're concerned about a credit card balance that's getting out of control, contact your bank. You might worry that they'll be mean to you, that a customer service agent might judge you harshly, or that you won't have the cash to satisfy them. In reality, nearly every major credit card issuer maintains some version of a "hardship bureau," staffed with specialists who want to help you resolve your outstanding debt. These professionals have seen it all, and they can usually offer deferred interest, lower monthly payments or fee amnesty programs.

When you really can't afford to pay your credit card bills, seek advice from a bankruptcy attorney. He or she can help you assess what's at risk if you fail to make your monthly minimum payments.

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