Midland settlement opportunity

Make sure no one will come after the other half trying to collect that later. Also, be prepare to receive a 1099 (or 1098, i always forget which one) at the end of the year. You may have to claim the settlement difference amount as income and pay tax on it.

I will call them today and ask about all of this..If it's going to cause me hassle later on, forget about it..They'll just have to go back to the line and wait their turn...lol I'm putting myself out a bit by doing it this way anyway, I just don't want to pass up a good deal.

That looks good. Keep the record safely. The letter states that it will be considered paid in full. You can use it as evidence.

Clay, I think it's 1099 :D

I would like to know how a settlement can result in a 1099. How can it be considered income?

I would like to know that as well. They didn't GIVE me a refund.

So when Kroger gives me 10 cents off a can of green beans, I should have to claim that as income?? LOL Bad analogy, but same thing...lol

Suppose you owe $100 and you settle the account for $50, hence you receive a benefit of $50. That is the reason it is considered as income.

By submitting 1099 form one ensures that the forgiven debt never goes to another agency. Sometimes creditors or collection agencies send 1099 form with the agreement papers too.

That simply isn't right IMO.

[quote=Tammy]That simply isn't right IMO.[/quote]

That is the reason people do not go for settlement sometimes.

But if I have to claim it as income, I have to pay taxes on it???

I think you can also claim that you are insolvent if I remember correctly. Mainly you don't have the extra money or something.

What would happen if I didn't file the form? What if I just said I didn't get it? LOL I'm not one to fraud, but I think it's dumb that I would have to pay income taxes on it, when they bought the debt for nothing.

I honestly don't know but I would not suggest not filing the form. I'm sure someone knows better than I do.

I'm going to call them tomorrow and ask them if they're going to do that...If they are, they're just going to get put back in line and paid later.

If the discharged amount is higher than $600 then only you need to file 1099 C form. Actually the creditor shows it as a loss; hence it is your income.

Also browse http://www.irs.gov/ for more information.

BTW, if creditor does not send the form after settlement, I think you are not obliged to submit it. Also you can avoid it if you show it as a gift, instead of income. A lawyer could give some more info here. Where is VLD?

Well I'm right there on the edge, $538.00. I'm going to call them today.