Have 40,000 in Debt and wan to settle in lieu of Bankruptcy
Date: Sat, 03/13/2010 - 12:37
Chase $10,500
Chase $10,200
Citi Sears Mastercard $3200
Bank of America $8000
American Express (NCO Collection Agency) $9800
American Express (Nationwide Collection Agency) $1600
My accounts are probably all nearing 5 months of being unpaid.
Will I always have to pay taxes on the forgiven portions of debts?
I am shooting for a 30-50% payoff on each card (basically shooting for them to reduce the balance by 50-70%) Is this realistic and I am better off waiting until they get sold off to a collection agency? The banks I owe money to are listed above (The 2 Amex accts appear to have already been sent over to a collection agency although I think AMEX still technically owns the debt)
Am I better off negoiating with the original creditors or waiting for the debt to be sold to a collection agency?
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Which is the period of time of being unpaid that is the best time to negoiate with the above mentioned creditors?
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Is there ever a time or a bank that you can make a payment of even $50 in order to initiate a debt settlement? Bank of America is offering to settle for about 33% but they first want me to make a small payment on both of my accounts in the amount of $50 each at a branch in order to activate or initiate a debt settlement agreement and that they no longer put the settlement in writing BEFORE a small payment is made because people were taking a settlement in writing and then waiting 6 months to start paying and by that time the debt has increased substantially.
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Any help would be greatly appreciated.
Try settling before bk - it's worth a try. I figure if someone
Try settling before bk - it's worth a try. I figure if someone sues me than I'll just file bk, but I'm trying to settle mine first. My understanding on giving them a payment is that it does not initiate a settlement, it's just a ruse to get a payment in. I'm sure someone more knowledgeable about this will comment, but I will not make a payment until I receive the settlement letter. I have a fax so it's not hard to do.
Well Deb bie, as far as my knowledge is concerned, if your unpai
Well Deb bie, as far as my knowledge is concerned, if your unpaid portion of debt is more than $600, then it's considered as an income by the IRS (Internal Revenue Service).
When a credit card company does their reporting, they would report the unpaid portion to the IRS as a forgiven debt and will send you a Cancellation of Debt Form, 1099-C, for filing your tax return. Now it depends on your situation and also on the amount of forgiven debt that, whether you will pay the taxes or not.
I think you're aiming right and its time to step into negotiations as you are already late by 5 months. But do get things in black & white to avoid any litigation.
