My 2009 Chapter 13 and eventual debt settlement journey

[njguy1972]

Another update for those who may be going down the same path as me in the future. I received all my 1099s.
Amex 1 - was fine with a date a few days away from the actual settlement date and same amount of debt forgiveness. (checked the box debtor not liable)
Amex 2- has issues. The canceled date is the 1st of the next quarter and they have added interest being forgiven. (checked the box debtor not liable)
BOA - 1099 was fine (checked the box debtor liable)
Discover - 1099 had a cancellation date of 12/31/09 with the correct settlement amount (checked the box debtor liable)
Citi - have a cancellation date 10 weeks before the actual settlement date, all else was fine (checked the box debtor liable)

I am checking with a CPA friend of mine if i should make a big deal over this. I am claiming insolvency and with Turbo Tax all seems in order so that i am not responsible for the taxes on the forgiven amount.

My CPA friend told me in the past to mail my return in with details of the settlements and my insolvency worksheet. The agreements will show the actual dates the debt was settled and I do not expect any issues.

I hope this helps people in the future who may have the option of going down the settlement road like me.

[paradiddle]

How are you doing on your insolvency - Form 982?

[missemo]

I got a 1099 C 4 day's ago from Discover...Good Luck

[njguy1972]

Everything worked out. I had to use the dates on the 1099's that they use. For Discover all their 1099's say 12/31. My tax refund will be in my account tomorrow. I did get corrected 1099's from Amex with a different date and checked with me being responsible for the debt. It will have no affect on my refund so I will send in the correction to the IRS after the refund hits my account tomorrow. I would rather have the money in my hand before sending them something. I am not sure if I sent it in this week if they would have pulled the refund back.

The key for me is my property value. Since I am in a condo it is easy to find similar units that sold. I reviewed property sale records for my county to get values. This way if I get audited I have proof.

Because of the 12/31 date by Discover I am getting a refund of $500-$1000 less than I hoped to. In the 6 months between the actual settlement and 12/31 my retirement accounts increased by 20k and property went up about 10k. At the same time I paid down about 3k on my auto loan.

For me this was the right move. For others it may not be. I just want people who are considering this to know the facts and what potential things can come up.

[Depressed]

Just curious, which of the acccounts had already charged off when you made the settlement agreements? Did they also send everything in writing to you before you sent them any money?

I'm planning on filing a Chapter 7 in the near future, but if I have to go the Chap13 route, I'd rather settle as well.

[Cheeseater]

Which form did you use in turbo tax to show your insolvency? I've filled out 982 but I'm having trouble finding a worksheet for listing my individual settlements. Did you make your own and attach them to the 982?

Thanks for posting your experiences. It helped me a lot in my dealings with my creditors. I held out with BOA for 15% on 75k till the end all the while they told me there were no 15% settlements. On the day before charge off they faxed me a settlement offer of 8% spread over 4 payments, all the while I was offering them 15%. What a bunch of idiots.

[spidge]

Which form did you use in turbo tax to show your insolvency? I've filled out 982 but I'm having trouble finding a worksheet for listing my individual settlements. Did you make your own and attach them to the 982?

Thanks for posting your experiences. It helped me a lot in my dealings with my creditors. I held out with BOA for 15% on 75k till the end all the while they told me there were no 15% settlements. On the day before charge off they faxed me a settlement offer of 8% spread over 4 payments, all the while I was offering them 15%. What a bunch of idiots.

Lucky Dog. Nice settlement.
I am still reluctant to file BK and came into a small amount of money in December enabling me to settle one of my largest debts. They(CA) called me and I politely asked them to send me a debt verification that was valid and included all neccessary information. Upon recieving the DV I called and offered them 10% and they offered 25%. We settled at 20% and I instructed them to send it to me in writting and they did. All seems well and good, but then after sending a certified check with copies of all the paperwork they sent me a "statement" indicating that I made a payment and showing the remaining ballance. I got on the phone pronto and while waiting on hold for a "manager" I made up a violation letter. When the manager got on the phone I asked politely for the mistake to be corrected. She was reluctant so I asked for her email so that I can send her a copy of the letter I am sending them in the mail and a copy to every government agancy I can find listed. The letter did state the violation and some others and that they were responsible for these if this was not corrected in ten days. I did not let her say anything after she gave me her email. That was a Thursday and, well the weekend went by with no calls or letters so I sent off a reminder with a count down. She hought I was counting bussiness days huh. I wrote to her would you count bussiness days? It was all settled Monday afternoon by a VP of the company stepping in with an apoligy.

I am also interested in knowing which form to use.