Negotiate a Debt Settlement
Credit card debt, is the following statement true?
"Do you have the settlement amount in full? When you try to negotiate settlements, often times you need to have enough funds to make large payments. Additionally, be aware that any "forgiven" debt by the OC is considered taxable income by the IRS" Trying to negotiate large credit card debt down. 8 credit cards 25%, can not consolidate and do not want chapter 13 on record 10 years.
Public Comments
- Everything written is true. Incredible, but true, yes, whatever they write off is considered taxable income. They don't tell you that when they cut you the deal. Incidentally, no, you don't want Chapter 13, particularly since they'll drain every cent of your income, all of the disposable and some of the non-disposable, for five years so that you can then have to deal with it for years afterwards. Go chapter 7 or go to credit counseling.
- yes, call them and offer them 20 cents on the dollar, but only if you have it.. check out the master of getting out of debt, DAVE RAMSEY www.daveramsey.com You should get the book by him, called TOTAL MONEY MAKEOVER
- If you are negotiating settlement, you need to have the funds on hand. Lump sum gets the best deals. Any payment plan has to be very short term. The creditor can file a 1099 for any amount over $600. You would have to include that with your taxable income. Paying the taxes on it, is still a lot cheaper than paying the entire amount. If you are not currently in default with these credit card companies, it is very unlikely they will accept a settlement of only 25% of the balance. If fact, they are not likely to accept any discount on the balance. You might be able to negotiate lower interest rates, if you convince them your are on the verge of default. To get a 25% settlement accepted, your debt would have to be 3 or more years in default. But good luck.
