Here's the deal:
Earlier this year, when I thought I had a fighting chance at getting rid of my debt on my own, I entered into a settlement agreement with one of my creditors.
After completing the settlement agreement, I inadvertently made an additional payment to the settled credit card instead making the payment to my husband's credit card. Because I called the bank, informed them of the error, and the extra payment was refunded. This payment and subsequent refund reversed the settlement and I received a letter stating that the settlement was now null and void and full payment would be pursued.
I wasn't too upset about this because between the time of my last settlement payment and the date of this letter, I'd decided that bk was most likely my best option. In my mind, the only thing worse than completing a settlement and then filing for bk, is being 1099'd for the deficiency amount on top of that. So I felt like at least if the settlement is null, I'm saving the income taxes that would have been payable on the deficiency.
This morning, I receive a call from a company stating that my account is now in pre-legal status. Here's my question:
My husband and I don't plan to file bk until Jan 2011. I can call the bank, clear this up, return to settlement, and get 1099'd for the deficiency. Or, I can leave things as they are, be pursued legally, and seek to discharge this in bk. I'd like some advice as to which option makes better sense.
I've never been pursued for judgment so I don't know if my wages can be garnished and if it's worth it just to pay the income taxes on it and be done. Any information that any of you can provide regarding this is greatly appreciated.
Earlier this year, when I thought I had a fighting chance at getting rid of my debt on my own, I entered into a settlement agreement with one of my creditors.
After completing the settlement agreement, I inadvertently made an additional payment to the settled credit card instead making the payment to my husband's credit card. Because I called the bank, informed them of the error, and the extra payment was refunded. This payment and subsequent refund reversed the settlement and I received a letter stating that the settlement was now null and void and full payment would be pursued.
I wasn't too upset about this because between the time of my last settlement payment and the date of this letter, I'd decided that bk was most likely my best option. In my mind, the only thing worse than completing a settlement and then filing for bk, is being 1099'd for the deficiency amount on top of that. So I felt like at least if the settlement is null, I'm saving the income taxes that would have been payable on the deficiency.
This morning, I receive a call from a company stating that my account is now in pre-legal status. Here's my question:
My husband and I don't plan to file bk until Jan 2011. I can call the bank, clear this up, return to settlement, and get 1099'd for the deficiency. Or, I can leave things as they are, be pursued legally, and seek to discharge this in bk. I'd like some advice as to which option makes better sense.
I've never been pursued for judgment so I don't know if my wages can be garnished and if it's worth it just to pay the income taxes on it and be done. Any information that any of you can provide regarding this is greatly appreciated.
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