Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
How negative is accepting a debt settlement on one's credit? The creditor to whom I owe the debt is offering a settlement of about 1/3 of the original value. I realize paying the debt in full would be best, and what I would prefer, but it is not an option at this time.
I searched this topic, but the results dealt with debt settlement companies, which is not the case here.
How negative is accepting a debt settlement on one's credit? The creditor to whom I owe the debt is offering a settlement of about 1/3 of the original value. I realize paying the debt in full would be best, and what I would prefer, but it is not an option at this time.
I searched this topic, but the results dealt with debt settlement companies, which is not the case here.
Also remember you will get a 1099 on the difference and you then owe money to the IRS. For example, you owe $9,000, settle for 3k. You will get a 1099 for 6k, if you are in the 28% bracket you then owe about $1500 next April.
Also remember you will get a 1099 on the difference and you then owe money to the IRS. For example, you owe $9,000, settle for 3k. You will get a 1099 for 6k, if you are in the 28% bracket you then owe about $1500 next April.
I've never heard of that, but good to know. Thanks.
I've never heard of that, but good to know. Thanks.
Yeah, the people making you the offer won't tell you that and the IRS considers the forgiven debt income (just like they gave you free money).
Not a deal breaker but it should be considered in your negotiations to settle because the deal offered is less sweet after you add the tax costs back in!
The credit line is $2500; I owe $27xx due to interest & late fees. The creditor is offering a settlement of $948. I'm five months and $5xx behind on the payments. The way I see it, if I had the $948 to take the settlement, I could just make the payment to bring the account current.
After researching and thinking about it, that's the objective I'm going to work towards. I may or may not be in the same situation in another six months, but I think it will be better than taking the settlement. Hopefully, I'll get the job in the next few months that caused this balance.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
