Open credit cards and negotiating paid in full status

[kkemper]

I have two credit cards, Chase and Capital One. I've carried a balance close to the maximum credit line (and paid the interest/they weren't introductory no interest periods) for approximately nine months now. I'm wondering if anyone has had experience with 'settling' with either creditor for less than the actual balance and having the cards remain open and active. If so, I'd appreciate some guidance as to how to get this done.... Thanks

[llecs]

Don't do it. First off, they won't accept a settlement and allow it to remain open because it can happen to them again and lose more money. They will be open to a settlement once defaulted or closed. Assuming for a sec. they allow it to be closed and settled without going into default first, FICO scores a "settled" comment on par with a charge-off and that can drop your scores.

[RobertEG]

Unlike unreceived debt that is delinquent, they cannot charge-off receivables that are in good-standing.  Thus, no tax writeoff by shfting the asset to bad debt.

I dont think many shareholders would take kindly to having their receivable assets in good-standing simply cancelled by management.

Additionally, with the debt cancelled as opposed to being charge-off, if $600 or more, they would be required to send a 1099c to you and the IRS, making you liable for the cancelled debt as taxable income.