Credit report after settling second mortage
Date: Wed, 08/01/2012 - 22:08
BOA agreed to settle my second loan with $26000 from $126000 that we owe. My loan accout was charged off due to not being paid and now I want to settle so that I can get off the second loan and keep my home .( Initially I planned to foreclosure).
Currently my credit history is showing as
"CHARGED OFF"
"ACCOUNT/Charged off as bad debt"
"Bad debt & placed for collection & skip"
on 3 credit reports
My questions
1. BOA mentioned that after the payoff . It will update the credit report to Settled in full . Will this be ok ? or is there any other that we can negotiate with them.
Note :I plan to refinance my first loan after this process completes. Not sure if this will happen .Just want to try.
2.They mentioned that they will be reporting to IRS.Will this amount be considered as income and be taxable.
Thank you for your time.
Currently my credit history is showing as
"CHARGED OFF"
"ACCOUNT/Charged off as bad debt"
"Bad debt & placed for collection & skip"
on 3 credit reports
My questions
1. BOA mentioned that after the payoff . It will update the credit report to Settled in full . Will this be ok ? or is there any other that we can negotiate with them.
Note :I plan to refinance my first loan after this process completes. Not sure if this will happen .Just want to try.
2.They mentioned that they will be reporting to IRS.Will this amount be considered as income and be taxable.
Thank you for your time.
Your account will be updated as settled in full or settled for l
Your account will be updated as settled in full or settled for less than the full balance. This is accurate.
You will receive a 1099-C from for the amount of debt that's being forgiven. This will have to be reported as taxable income. If you can prove that you're insolvent, you won't have to pay the tax. Go to irs.gov and check out how to prove insolvency.