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timetochange · Posted: Thu Jul 03, 2008 12:55 pm Subject:

Thanks Nascar, well that will be a bummer for me as I have a pretty astronomical cc debt to settle over the next few years. By the way, what does TL stand for? I know CA is collection agency and isn't JDB junk debt buyer?
Thanks!

Posted: Thu Jul 03, 2008 2:41 pm Subject:

TL=Tax Lien, but I can be wrong.

Posted: Thu Jul 03, 2008 4:28 pm Subject:

TL=trade line

Posted: Fri Jul 04, 2008 2:55 am Subject:

oops, sorry, I WAS wrong!! (insert embarrassed smiley here)

Posted: Tue Jul 08, 2008 9:20 pm Subject:

When you settle your debt you need to account for that 1099. I would offer no more than 80% of the original balance after subtracting off all the junk fees they tag you with but I would shoot for 50% of the original balance. For example, if you were loaned 5k and the balance after charge off was 8k then I would try to settle for no more than 4k which is 80% of the original balance. You would be taxed via a 1099 on 8k-4k which would be roughly .15% x 4k= $600. Your final cost would actually be $4600 out of 5000 received. The credit card company would save 20% of the loss on their taxes which means they would save .2 x 4k = $800. This means they actually received $4800 on a 5k loan. The IRS makes $600.

This math is why you see offers all the time of 80% of the final inflated value which is a royal rip off for the consumer. They often make offers of 80% of that 8k which would be $6400. This means the Credit Card Company is already profiting by 6400-5000 or $1400 dollars and doesn't even count the 20% right off on the ficticious loss they will claim of $1600. To make matters worse the consumer will be 1099'd for an additional .15% of that $1600.

Note: I use a tax rate of .15% but it could vary depending on an individuals tax bracket.

One of my favorite things to do is whip this math out on a collector when they make me some bogus offer over the phone. Then they will start arguing with me and I start making fun of their math skills. I tell them its simple math but if they don't understand I will start with the basics. 1+1 = 2. I usually get them pissed off then they hang up. hehe.

Posted: Wed Jul 09, 2008 2:52 am Subject:

You ought to record that and post it on-line. That would be classic!

Posted: Wed Jul 09, 2008 7:35 am Subject:

That is a pretty good idea (hehe). I just bought a device that lets me run a line into a recorder via a mic jack from a phone and also lets me reverse and run out of recorder via the ear phone jack back to the phone. I am going to purchase a tape recorder soon and start recording for evidence. If I get a good snip I will try to post it somewhere. It will probably take a while because I seldom get phone calls due to the CD I sent off.

Deni · Posted: Mon Dec 01, 2008 1:31 pm Subject: Arbitration Award was a "Stay"

In 2005 I was put in Arbitration and a stay was granted. Now a junk debt collector is suing me. What should I do? I am going to court since the debt was charged off by the original creditor and ceded to Chase. Now the junk debt buyers have it.

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