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settling for less on a judgment

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hopingsoon
Regular Contributor

settling for less on a judgment

Anyone with experience negotiating a settlement for less on a judgment, please chime in...

 

I am currently trying to negotiate a settlement and I would like to know what my options are.  I know that they do not have to settle for less.  I get that.  They have a judgment and are entitled to the full amount.  

 

Here's my question, they have made an offer which I would like to counter but before doing so I want to know if they can go back on this original offer.  

 

Long story short...  Judgment amount is 13,000 plus 7,000 in interest.  They have levied my accounts for a total of 10,000.  I would like them to accept the 10,000 they already have and consider it done.  I called them and the guy on the phone said he was authorized to settle for an additional 3,000.  I don't have an additional 3,000.  They took every dime I had.  

 

If I counter, are they in any way obligated to honor that 3,000 offer?  Or could they say forget it, now we will not accept anything less than the full amount?

 

He also informed me that whatever amount we settle for, we will have to submit a form to the IRS to claim the difference.  So we will be taxed on the difference between the settlement and the total judgment.  Is this true?

 

I met with an attorney who did not mention any of this stuff so I'm turning to the boards for some advice.

 

 



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gdale6
Moderator Emeritus

Re: settling for less on a judgment


@hopingsoon wrote:

Anyone with experience negotiating a settlement for less on a judgment, please chime in...

 

I am currently trying to negotiate a settlement and I would like to know what my options are.  I know that they do not have to settle for less.  I get that.  They have a judgment and are entitled to the full amount.  

 

Here's my question, they have made an offer which I would like to counter but before doing so I want to know if they can go back on this original offer.  

 

Long story short...  Judgment amount is 13,000 plus 7,000 in interest.  They have levied my accounts for a total of 10,000.  I would like them to accept the 10,000 they already have and consider it done.  I called them and the guy on the phone said he was authorized to settle for an additional 3,000.  I don't have an additional 3,000.  They took every dime I had.  

 

If I counter, are they in any way obligated to honor that 3,000 offer?  If it has an exp date attached to it yes if not no. Or could they say forget it, now we will not accept anything less than the full amount? This is always a possibility unless as I said there is an exp date tied to the offer,

 

He also informed me that whatever amount we settle for, we will have to submit a form to the IRS to claim the difference.  So we will be taxed on the difference between the settlement and the total judgment.  Is this true? Yes, but it appears this would be just for the interest if they settle the account for 13K and they can only do so if in fact they included that interest in their gross income, if they didnt then a 1099-C would be bogus. Also on the 1099-C if you are insolvent at the time its issued you can get out of paying the taxes.

 

I met with an attorney who did not mention any of this stuff so I'm turning to the boards for some advice.

 

 


 

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