I took a Private loan initially for 16K and with interest fee and all that came up to 22K. Unfortunately, due to a financial hardship, my loan was in default and charged off due to 120 days outstanding.
I have been in communication with the Debt Collector. To make the long story short, they came up with a final offer to settle for 5K. What a generous offer! However, I would like to know the consequences if I'm taking this road and settle for 5K. Will I end up owing the IRS for the remaining balance?
By signing up a debt counseling session, your provided details (Name, Email ID and Phone No.) will be forwarded to the company advertising on the DebtCC. However, you have no obligation to use their services.
Some creditors and collection agencies refuse to lower the payoff amount, interest rate, and fees owed by the consumer.
Creditors/collection agencies can make collection calls and file lawsuits against the consumers represented by the debt relief companies.
Debt relief services may have a negative impact on the consumer's creditworthiness and his overall debt amount may increase due to the accumulation of extra fees.
The amount which the consumer saves with the use of debt relief services can be regarded as taxable income.