Settle credit card debt » Losses

Now Is The Time To Settle Unsecured Debt

admin — Sat, 03 Jul 2010 02:23:49 +0000

Debt settlement has been designed to help people whose unsecured credit accounts has fallen behind, it is an aggressive plan to help save as much money as possible in the least of time. The current economic situation of our country is dictating more and more banks seek solutions that will help them avoid losing money. Now is the time to go after settlements if unsecured credit accounts have fallen behind.

Settling unsecured debt is not easy, it is a process of tough negotiation, of patience and of knowledge. Today more banks are offering to settle accounts that are delinquent anywhere from ninety to one hundred and sixty days, this period is essential for any person looking to settle his/her accounts. First the banks want to settle in order to minimize losses and also not to send accounts to collection agencies.

Aggressive is the word that best describes debt settlement or debt negotiation, this is in fact because all accounts have a window of opportunity to be settled on as I mentioned before. This does not mean that if an account is referred to a collection agency it cannot be settled on. Yes, accounts can also be settled with collection agencies and sometimes it is better an account is let go to them. here is where the knowledge and patience part of negotiation comes into play because collection agencies play harder than original creditors.

Collection agencies will be relentless in their pursuit of a client, they will call a persons home, job, neighbors, etc.. If there is an excellent negotiations firm behind the client this stress can be minimized. Reason number one debt settlement companies or firms came into existence, to lessen clients stress.

In the case an account cannot be settled with the original creditor or a collection agency it may have to be settled with a collection lawyer. Accounts have a natural cycle and no one can stop it, the only action that can stop it is to negotiate settlements. Lawyers are extremely adept using scare tactics to bring clients into paying amounts of debt that have accumulated interest rates, late fees, etc… They will threaten with lawsuits, liens and many more tactics to get a person to buckle down and pay amounts of money not originally owed. Many actions by lawyers can also be avoided if addressed correctly by your debt negotiations firm.

Bottom line is, debt settlement is aggressive on both ends of the stick. Clients must learn to be as tough if not tougher than collectors. Patience is of the essence and not all settlements are to be taken first shot. Experience negotiating debt must be displayed, or collectors will eat a person alive. There are many firms with a reputable reputation that will do a fine job, that will keep stress levels down and not charge an arm and a leg for their services all we have to do is look and investigate far enough and we will find the solution that will help us eliminate our debt in the least amount of time possible.

By: Eric Gartle

Credit Card Debt Forgiveness – Will the IRS Arrive When Your Creditor Leaves?

admin — Fri, 16 Apr 2010 00:06:24 +0000

You have received a letter in the mail from your credit card company that it has accepted your offer to pay $5,000.00 to settle your outstanding debt of $12,000.00. You are elated that you have been able to achieve credit card debt forgiveness. But wait a minute before you throw a party to celebrate. You need to think about the IRS who just might be sending you another letter informing you of taxes owed on the $7,000.00 debt forgiveness you received.

Yes, that is right. Companies who forgive debts in excess of $600.00 are required by law to report the amount of debt forgiven to the IRS on Form 1099-C. You are then supposed to pay income taxes on that amount as the IRS views it as income to you. Of course, if you have losses or expenses to offset the taxes, then this may not be a problem for you but you will want to consult with a competent tax authority to make sure you handle this matter correctly.

There are two exceptions to this outcome. One is if the debt is forgiven in bankruptcy. The other is if you are insolvent which means your liabilities exceed your assets. If either of these apply, you will need to file IRS Form 982. However, you can only exclude the amount by which your liabilities exceed your assets. Say that you have assets of $250,000.00 and liabilities of $255,000.00. You will be able to exclude only the $5,000.00 by which your liabilities exceed your assets which means you will have to pay taxes of $2,000.00 of the $7,000.00 of credit card debt forgiveness. A person in a 30% tax bracket will enjoy savings of a whopping $1,500.00 if the exclusion applies.

By: Jason Rodriguez

Credit Card Debt Settlement

admin — Mon, 15 Feb 2010 05:32:54 +0000

Have you started receiving credit card debt settlement notices in the mail? Have you been receiving collection calls? If this is the case, you have probably been in debt and been dealing with financial difficulties for quite some time.

Creditors are sometimes willing to settle the account for a lesser amount if the credit card account is seriously delinquent or has been written off. This creditor will usually accept the settled amount in one payment and the payment has to be made within a short period of time.

Now you may wonder why a creditor would settle for less than what is owed. Your credit card issuer is trying to reduce their losses and they have concerns about you paying this debt. Your credit issuer feels that recovering some of their money is better than not getting any of it back. Keep in mind that accepting a settlement may affect your borrowing ability in the future with this creditor, but it is a better option than bankruptcy or doing nothing at all.

A creditor will not usually settle on an account that is current. Normally, the account has to be at least 90 days delinquent before they will talk settlement and many credit card companies will wait longer than that. Here are a few things you should be aware of before agreeing to a settlement.

1. Your settlement payment may not completely satisfy the debt. There is a possibility that the uncollected portion of the debt could be turned over to another collection agency for further collection activity, but this is not the norm.

2. The IRS considers the amount of the debt that has not been satisfied as income. Any amount that exceeds $600 will be report on a 1099, to the IRS, by your creditors. You will be required to pay taxes on this amount.

3. Know what’s on your credit report. If the debt is not on their at all, it is not recommended that you do anything with this debt. If it is showing as being “charged off,” this is negative note on your credit report. If you settle, it will be noted as “settled for a lesser amount” which as also somewhat negative, but not as bad as doing nothing about it at all.

The best thing to do is to try to deal with the original creditor. Communicate with them in writing. If they will not deal with you, contact the collection agency in writing. If at all possible, try to negotiate a repayment plan on the balance. If you decide to settle the debt, get the terms of the settlement in writing to avoid problems on down the road. Once you have paid the debt, ask for a “release of debt” as proof that the company has agreed that the debt has been satisfied.

The best thing that you can do for yourself is to examine the curcumstances that caused your debt to get to this point and to put a plan in place that will prevent you from ending up there again.

By: Marjorie Salada