By: Sgt Big Red

Sgt Big Red — Mon, 01 Mar 2010 13:18:04 +0000

With the current credit market being in such trouble, I doubt that they would take that offer. Unless you own no property, have no assets and are basicaly “flat broke”, they sure won’t offer a credit card at that low an APR just to collect part of what you owe.
Here are some scenarios of what they may do!
They will most likely just take a “charge off” of the debt (for their tax purposes),
They may take legal action to seek a “writ of garnishment”.
They may sell the debt to a collection agency and charge off the ballance not payed off by the sale of the debt.
Remember this, they are the original creditor, the Fair Debt Collection Practices Act DOES NOT apply to major credit card banks? It applies only to the collection attorneys and professional debt collection companies they might hire.
There are also IRS issues you must deal with if a creditor has written off your debt, especialy such a large one. You may receive a 1099-c from the creditor. You must claims this amount as income on your taxes because you never paid it back- thus making it income.
However if you “settle” this debt as “paid in full” with the creditor make sure you ask that the creditor agrees to the settled in full arrangement and not send the remainder as a loss to the IRS. If the creditor willingly accepts “less than” as “full payment” then make sure they agree not to report remainder. The creditor can refuse but usually does not.
You may need to beg, borrow or sell everything to raise the $6,000 to settle this debt but you would be better off in the long run.
Good luck and hope you can settle this issue
LEGAL DISCLAIMER: The advice contained herein is for informational purposes only. It is not to be construed as Legal Counsel nor Legal Advice.

By: Batlise

Batlise — Mon, 01 Mar 2010 09:02:50 +0000

PLUS $6,000 at 14.99% interst is $5,636.97 in interest.
And the 1099 is true.

By: Lys C

Lys C — Mon, 01 Mar 2010 04:44:10 +0000

Odds are they won’t do that – you may be able to get them to do 8 payments but I don’t know. Call them and talk to them – you may be able tomake payments but just won’t get the $6,000 settlement amount.
One thing to remember – if you settle for $6,000 you will get a 1099 for the additional $23,000 that you are not paying off and you will need to pay taxes on this amount.

Comments on: Question About Debt Settlement?

By: Sgt Big Red

By: Batlise

By: Lys C