Settlement 7 cards @ 20%
Date: Wed, 10/27/2010 - 15:56
Look up insolvency. It appears that you probably are. If you a
Look up insolvency. It appears that you probably are. If you are in debt greater than your assets, then you do an IRS worksheet. If you search on here there is a thread or two about it and google on the net as well. You dont pay taxes if you work out to be more in debt than you have in assets. Good Luck
Quote:Originally Posted by AnonymousI got settlement offers for
Quote:
Originally Posted by Anonymous I got settlement offers for 7 cards from 3 companies at 20% after 120 days. Now the question is - all 3 companies are going to send me 1099-C for about $65k. How to deal with this? I can't afford to pay taxes on 65k. I own a house and it is going to be foreclosed very soon. Please advise. |
It is highly unlikely to receive 7 settlements at 20% at 120 days. So, I am calling you out. Most cards are not settled until close to, or after 180 days. My friend in the business tells me that at 120 days they are still deemed to be potentially collectable in full.
And if they forgave 80% of your debt, and if you are solvent after it then you are going to owe the tax. There is an insolvency provision in the tax code. But it sounds like you are solvent. So why would they write off 80% of your debt at 120 days? If you are being straight and post the proof, I will personally apologize. If not, please do not post bad information here. The folks here are trying very hard to get past a difficult time. Many settle at 40% when they are flat broke and prove it to the creditor. And they surely never received a 20% offer. In my experience, each creditor was vastly different from the others. One would want 70% and the next would settle at 40. BOA settled at 30%, but there certainly was no blanket settlement of a particular % for all.
And if you are being truthful, please join the forum as a member so we can exchange ideas. I cannot deem an anonymous poster reliable.
Debt Samaritan, What I posted is the truth. I am in deep finan
Debt Samaritan,
What I posted is the truth. I am in deep financial problems and I had my history with the CC companies was verygood for the past 10 years. So, they might have considered my request and got the offers. I haven't posted here to misguide members of this forum, but I posted with a question. I don't know how to register, otherwise I would've done it.
I did the negotiation myself with the CC companies, but at the cost of going through the painful process of attending phone calls for about 100 days.
My assets are only my house which is now 40% of my mortgage balance, so I am foreclosing it. I have about another 40k student loans for me & my spouse and 20k more unsecured loans.
Assets - 40k (house current market value) + 20k 401(k) balance + 3k car
Liabilities - 95k home loan + 100k (total cc debt) + 40k (student loan)
Settlement offers on 81k cc debt for 17k
This is my situation. Please advise if the insolvency applies to me?
Rchig, I am not a tax pro. I suggest you speak with one who kno
Rchig,
I am not a tax pro. I suggest you speak with one who knows how to apply a solvency test as relates to section 982 of the IRC.
That said, given the detail you provided in your follow up post, you are technically insolvent.
Mileage may vary