Do I contact the CA or Cap One?

Hi Ashley,

Go ahead and contact the CA. Since the account has just been 'assigned', you can contact the CA via mail or phone for further communications.

You can also contact Capital One for paying the debt and they'll contact you to the assigned CA. Mails generally make the process lengthy, so make the initial contact over the phone. Later, if need arise, you can communicate through mails sent through certified mail with a request for return receipt.

Cap One wont communicate or negotiate thru the mail....that is a waste of time and will probably void the settlement.

Hi Ashley,

I would probably contact CA over the phone. They already sent you a settlement offer in the mail that they should honor when you call in.

I want to make sure that you are aware when you settle on a debt, most likely you are going to pay taxes on the "Forgiven Debt Amount" . What "Forgiven Debt" is, if the difference of the amount settled exceeds to be more then $600.00, someone has to pay taxes on the debt. Since the creditor forgave the debt, the consumer may have to pay taxes on the debt. At the end of the year, you may receive a 1099 in the mail & have to file the difference as "Earned Income" in your taxes.

You said you owe CA approximately $4400.00, if they settle for $2200.00, the difference of the $2200.00 you may get 1099'd.

I hope I was able to answer your question. If in need of free financial counseling by a certified financial counselor, please do not hesitate to contact me.

Thanks for the input, all. I contacted my other two companies today, CitiBank and Chase, about settlement offers I had received. CitiBank has offered to forgive about $22000 and settle for around $6000, and Chase agreed to settle for around $2000. I am worried, however. The people I talked to at Chase said I would receive documentation on the settlement after I made the first payment. I have to talk to CitiBank again next week, but I am worried they will say the same. They refused to send me anything before making a payment. I'm terribly worried they are lying to me.

The 1099 thing does worry me, but I would prefer to settle versus bankruptcy. I can't, however, afford to lose this money my family is loaning me to settle my debt, and then be forced to file bankruptcy later anyway.

Also, both places wanted to do automatic withdraws. I told CapitalOne no, and they agreed I could use Moneygram? to receive code 1164. Just wondering what thoughts are on this. CitiBank refused to do anything but automatic withdraws... so I was planning to use my pre-divorce checking account, which no money is kept in, just for this purpose.

Any input that anyone could give me on these arrangements would be appreciated. I'm losing a lot of sleep over this right now.

Also... I was thinking of calling Chase back, and asking them to go over the terms on the phone with me again, and record the phone call. Would this cover me in any way? I'm in Colorado, not sure what the law is here.