The advice on here has been great and I have achieved my main goal of getting EX and EQ above 600 by paying off my toy cards and paying off some small legitimate collections.
My dilemma is this: I have some very large collections with JDBs. They are over SOL and I have DVed them. I could settle them but I have a big issue with that. My main concern is the 1099 issue. While I am in a good financial position now the tax liability on settling these would be huge (5 figures) which would put me in bad financial shape again.
In doing a lot of research I think I could fight these and get them removed. (They will fall off on their own in about 2.5 years) I am very concerned though that if I did that I may get a 1099. Has anyone had that issue, getting a 1099 after the JDB is removed from a BBB or FTC / AG complaint?
So I am debating if I should fight these, settle these, or just let them fall of in a couple of years? (I understand that the debt does not go away after the CRP) I know that it is important to handle your debt and pay your bills which I want to do.
While I have paid many of my legitimate collections, because of the way these JDBs have operated, misreporting on my credit reports, lack of dunning letters, other legal violations, trying to bill me more than twice the amount of the original credit card charge off, lying on the phone, BS DV responses or lack of DV response, etc. I am not certain I want to reward them and thier generally unethical business practices by paying them anything.
Since there are many good opinions and facts from the posters here, just want to get advice on what I should do because while I am in decent financial shape now, a five figure tax liability would really put me in bad shape. Maybe the tax liability would not happen if I fight these and I am just paranoid.
JDB=Junk Debt Buyers. The 1099's obviously only apply if the debt is settled for less with more than $600 outstanding. If you BBB them, I'm not sure that it clears your responsbility for the debt moreso than it stops that particular company from collecting. You would have to be advised on the 1099-C.