Q's regarding settlement offers

[scsurfer]

Is it better to try to settle with the OC or 3rd party collector(in terms of getting a better/easier settlement)?

are recorder verbal agreements to settle as binding as a written agreement? (meaning if I call them up with my one time offer to pay now over phone and this will settle debt)

My situation, I have a 3K credit card debt with HSBC, 60+ days late, I have bigger fish to fry than this one, not filing BK, and have the means to settle this for 1K and move on to dealing with the bigger fish. They have made an offer for 2K expiring 2/9, I was thinking of calling them 2/10 and offering them 1K to settle. Any thoughts or suggestions from others experience? Thx

[flyinbroke]

After doing my home work on this, I decided to file BK. Why?

1. Most refuse to put anything in writing. Some say they will but you have to make a payment first. This is unwise as this restarts the SOL clock. Not sure if recordings hold up as contracts but I have heard most phone folks are not in a position to change contracts. I refuse to do business without something in writing first; I have yet to have anyone take me up on that.

2. The money you don't have to pay is reported to the IRS is income. I had not used one card in years...which means all that I owe is interest on top of interest. No freakin' way am I counting bank profits as income.

3. After changing the rules, and counting this as income, once you pay the banks have been known to turn around and sell the remainder to debt collectors. So you are back to square one.

I decided on the zero percent settlement plan (hopefully.)

[DebtHater]

If you do come up with an agreeable offer there are a few things to consider:

1) Get it in writing! If it's not in writing it didn't happen. Those "recorded" phone calls are are to protect the creditor, not you.

2) Do not give them any account information and pay over the phone. That $1000 agreed settlement could be mistakenly entered into their system as $2000. You will never see that money again because you did owe it.

If you do come up with a settlement you should get it in writing and pay with a cashiers check. No electronic assess to you bank account.

Furthermore, if you settle with the original creditor (bank), you will have to pay taxes on the forgiven amount as it's considered income. If you were to settle with a collection agency, then you shouldn't be responsible for the taxes.

[scsurfer]

If you do come up with an agreeable offer there are a few things to consider:

1) Get it in writing! If it's not in writing it didn't happen. Those "recorded" phone calls are are to protect the creditor, not you.

2) Do not give them any account information and pay over the phone. That $1000 agreed settlement could be mistakenly entered into their system as $2000. You will never see that money again because you did owe it.

If you do come up with a settlement you should get it in writing and pay with a cashiers check. No electronic assess to you bank account.

Furthermore, if you settle with the original creditor (bank), you will have to pay taxes on the forgiven amount as it's considered income. If you were to settle with a collection agency, then you shouldn't be responsible for the taxes.

Per your advice, and with my further research, I will definitely get it in writing and not pay until I do, also I will not pay with electronic bank access. As far as bankruptcy I make too much to file for CH 7 and before considering 13 I'm trying my hand at getting out of debt by settling or waiting out the SOL. I'm dealing with 3 unsecured debts, 2 being credit cards, 1 an ATV loan. My credit is trashed from a forecolsure so I have little concern there.

[flyinbroke]

Technically, the prelim means test says I make too much. I am waiting for a lawyer's visit to confirm that though. My rent is twice what the so-called allowable rate is for my area...I don't know of anyplace that cheap around here.