To good to be true? Debt settlement?
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To good to be true? Debt settlement?
| Mon, 12-28-2009 - 8:30pm |
I have a quick question for you. Today I got a call from the "legal department" of the credit card company that we owe money to. They said that if we paid a certain amount within 150 days that they would consider us paid in full. This amount is 19000 less than we owe. Have any of you done this before? If we do pay them this amount will we be penalized in the end for doing it? Will this hurt our credit any worse than it already has?Thank you so much for your feedback



"They said that if we paid a certain amount within 150 days that they would consider us paid in full. This amount is 19000 less than we owe."
Wow.
Hi there, I would get anything & everything in writing from this company before any verbal agreements is reached. I would think in order for an offer to be made at all, you are not current on your payments?
I would ask what effect this will have on your credit, and also ask for that in writing. If the person states they can't put this offer in writing, then I would ask for their name, and then speak to their supervisor. chances are they don't have the authority to make such offers, but may get rewarded from collecting payments on an overdue account.
Good luck and let us know how it goes!
http://www.TickerFactory.com/savings/
I'm not sure how it would affect your credit, but you should know that any "forgiveness" over $600 can be reported to the IRS and considered a form of income. The credit card company can submit what is called a 1099-C for the amount of the forgiven debt (in this case, $19,000), and you could then be responsible for paying income taxes on that amount (at 30%, that would be $5,700). There are loopholes that can alleviate or eliminate that responsibility (proving insolvency for one - that is, that your liabilities at the time of the forgiveness outweigh fair market value of your assets), but there are no guarantees that you will fit the requirements.
Just want to be sure you weigh all of the potential outcomes when making this decision - GOOD LUCK!
I know I am not the most trusting individual, so I could be way off in left field on this.