Offer from Citi

[lovemybugs10]

They offered 9k on a 20k (original amount) credit card. Current balance is 35k with all the interest and fees.

Guess not talking to these jerks does some good.

I'm going to offer them 8, but I'm willing to pay 9.

I'm so excited. I was worried about them (they are my highest balance!)

[jacko]

I'd start with 2k and go from there.

They offered 9k on a 20k (original amount) credit card. Current balance is 35k with all the interest and fees.

Guess not talking to these jerks does some good.

I'm going to offer them 8, but I'm willing to pay 9.

I'm so excited. I was worried about them (they are my highest balance!)

[keepsmiling]

Please keep us posted!!! Good luck.
I am getting offers for 52% from one of my cards- can't remember which at the moment, but it's way too high.

[lovemybugs10]

Jacko, do you have any experience with negotiating with creditors?

[jacko]

Never will settle with creditors. Your original balance was 20k before they piled on the fees and interest. You should offer 2k as a starting point, which is 10% and claim poverty with them. I would not go over 5k. Remember, you will pay taxes.

Jacko, do you have any experience with negotiating with creditors?

[lovemybugs10]

I know, thanks for the reminder.

The good part is they have no clue of our financial status. We haven't opened any other credit, etc. The bad thing is ARM is handling the account. I've read they are bottom feeders. I'm almost a little afraid to talk to them. I'm waiting until that passes because I know if they smell fear they will eat me alive.

I am a little worried that if I go too low, they'll laugh all the way to the court house, is why I asked. I would love to know if anyone has gotten them to take something that low?

[josephga]

They offered me 7k on 24 k. I said no. who has 7k laying around

[DebtHater]

A word of warning, if you do take an offer to settle, get it in writing! Do not fall for their tactics that the offer is only good now and you must give them a check over the phone. Do not pay a single cent until you get the offer in writing. If it's not in writing then it didn't happen.

Once you get it in writing then only pay with a cashiers check or money order. This way they will not have any of your person account information and they then can't "accidentally" take more than agreed upon.

[frogger]

So is your purpose to settle all of your debts or are you anticipating bk in the future?

[DebtHater]

I forgot to add. If you do decide to settle, you will be responsible for taxes of the difference. Example if you settle for $9,000 on a $35,000 balance, you will get hit with a 1099 for $26,000. $26K times you applicable tax rate will be a good size chunk of change.

[SkyeOwl]

I forgot to add. If you do decide to settle, you will be responsible for taxes of the difference. Example if you settle for $9,000 on a $35,000 balance, you will get hit with a 1099 for $26,000. $26K times you applicable tax rate will be a good size chunk of change.

Not necessarily. AFAIK, it depends on whether you're insolvent at the time you settle. Check with a tax attorney to be sure.

[keepsmiling]

From ehow:
Compile your 1099-Cs if you received more than one and add up the entire amount. For example, if you owe $10,000 on a credit card and you settle the debt for $5,000, the credit card company would write off $5,000 and report this to the IRS on a 1099-C. The IRS would technically treat the $5,000 as income. Creditors are required to report debt cancellation or settlement that is $600 or higher to the IRS.
2
Make a list of and account for your assets. Your assets would include all the valuable things you own that could be sold for cash. These include your home, car, jewelry, art work and other valuables. When making this list you need to determine their fair market value. It will help if you have documentation that shows current market value and, for things like art work, current appraisals.
3
Make a list of and account for your liabilities. Your liabilities will include any debts, including debts owed on some of the articles listed as part of your assets.
4
Create a financial statement and determine your insolvency. Using the two sets of numbers, create a financial statement, which is a table of your assets compared with your liabilities. If the total amount of your liabilities in dollars exceeds the fair market value of your assets at the time you received any form of debt cancellation or settlement, you are deemed by the IRS as insolvent. If you are insolvent, you are not required to report the amount on the 1099-C as income. However it is advisable to file for insolvency because your creditors would have sent copies of your 1099-Cs to the IRS.
5
File for insolvency along with your tax return. You can do so by filing IRS Form 982, "Reduction of Tax Attributes Due to Discharge of Indebtedness." You may also send the IRS a detailed letter with a financial statement showing your insolvency. Bear in mind that the IRS forgives treating canceled debt as income only to the extent of insolvency. For example, if the total value of your assets is $80,000 and your total debt it $100,000, you are insolvent by $20,000 and only that amount of canceled debt can be excused from being taxed. So if you receive a 1099-C reflecting a debt cancellation of $25,000, $5,000 will be taxable.


Read more: How to File Insolvency With the IRS | eHow.com http://www.ehow.com/how_4780039_file...#ixzz17lJfiU3m

[shark66]

I wouldn't go anywhere near 8K, let alone 9. But that's me.

Some good advice was given here, I'd also start with 2K and see where that gets me, presuming I wanted to settle in the first place.

How collection-proof are you? That's one of the key issues here.

Also, if you foresee filing BK in the future, why settle at all?

My $0.02 only...

Good luck.

[lovemybugs10]

We would like to avoid bk. Even with paying taxes on the difference we pay, we will pay less settling than if we filed bk (we are 100% payback if we filed) our DMI is about 2k a month.

We are not collection proof. My husband makes decent money. We have no assets aside from two 8 year old cars that are worth 3-4k each.

On Monday I'm going to offer then 2k in cash or 5k in payments.

[lovemybugs10]

Ok, I'm trying to figure out the taxes. We might have someone prepare them this year to try to avoid mistakes.

At the end of Dec we'll have 70k owed to various collection agencies. That does include a 30k difference from a foreclosure and I'm assuming that because that isn't being counted as income anyway that we can't include it. So 40K in amts due. and we'll say 10k in total assets. (over estimated)

Do I wont have to pay taxes on the 6k Discover wrote off in my settlement with them?