Look at my offer for my settlement, is this pretty good? Hugh?

[jetsfan2010]

50 cents on a dollar isnt a deal for you, its a steal for them.

[tobee43]

i'm back tracking but very much agree! and if i implied otherwise i was incorrect!

[justbroke]

Not sure what you do if you get issued an erroneous 1099-C however. Hope you kept good records.
Agreed 50% isn't a great deal but if it gets the deal done and you can afford it, so be it.

I know, from experience, what an incorrectly issued 1099 is like trying to fix! It took me three years! The IRS also had added tax and interest for the wrongly reported 1099. The IRS told me that I had to resolve it with the issuer. The issuer even made it worse by sending in yet another "corrected" 1099 which was also wrong and had the wrong SSN on it. I finally got it fixed during my Chapter 13 (in 2009). This all stemmed from my 2005 tax return filed in 2006!

My records didn't matter to the IRS. They feel as though the person reporting the payment (on the 1099) did so because they thought it should be taxable. I'm sure you could go to a hearing and try to fight it, but it still took me 3 years and I'm still not 100% positive that they -- the IRS -- calculated the net result correctly.

(Also, whether interest and fees count is based on whether that interest and fees would have been deductible on your taxes. For consumer loans other than a mortgage, this is generally the case that catleg mentions.

[catleg]

I believe how horrible it must have been JB. I had a savings bond redemption double reported by a bank, I gave up on fixing it and just paid them in my chapter 13 since it made no difference to me.

[JackBondLove]

You'll only owe tax on the original principal that is forgiven, not the piled on interest, late fees, overlimit fees, and legal collections fees.
Not sure what you do if you get issued an erroneous 1099-C however. Hope you kept good records.
Agreed 50% isn't a great deal but if it gets the deal done and you can afford it, so be it.
I would try to get in writing an agreement that the credit bureau report will say "paid, satisfied" and that they won't file a 1099 on you. Otherwise I'd hold out for less.

Only for the amount that exceeds your level of insolvency.

see p. 4

http://www.irs.gov/pub/irs-pdf/p4681.pdf

[catleg]

Only for the amount that exceeds your level of insolvency.

see p. 4

http://www.irs.gov/pub/irs-pdf/p4681.pdf

True, but they count among your assets the "gross" value of any pre-tax retirement money (401k/IRA/etc), which is "grossly" unfair and unrealistic. :-)