Settlement Letter from OC with no Delete

[Chanduwar]

I just received a settlement from OC Merrick Bank. The debt is much past SOL. They have offered me 40% settlement, a little bit too much for me. I would like to send them a settlement amount from my end, with a delete request without resetting the SOL, is there a way. Also what is the 1099-C thing they mentioned, does anyone know? Chanduwar

[Anonymous]

I believe the basis of the 1099 is that whatever you don't pay since you're settling would have to be considered as "income" and you'd have to pay taxes on it when you file for 2008.

[Chanduwar]

How can this be settled without 1099-C?

[Anonymous]

That I honestly can't answer - I'm still a novice with all of this.  I'm sure someone more informed will come along soon though

I'm kind of curious about that myself as I'm about to look into settling with Cap1 since they're tanking my UTL with an old charge off from 05.  I don't know if they legally are required to report a 1099 for all settlements or not. 

[Anonymous]

The 1099-C they would send you is the deficiency of the original debt minus what you actually pay them. What ever that difference is.

The only way to avoid a 1099-C that I know of is to pay the original debt in full.

Sorry, I know that is not what you wanted to hear, but that's the way it is.

Message Edited by Sylviatob on 02-27-2008 10:55 AM

[Chanduwar]

But will I be able to ask for a Delete on this debt? What other repercussions of 1099-C?

[Anonymous]

the only 'repercussion' of a 1099-C is that you will owe taxes...  send a PFD to them in reposnse

[Chanduwar]

How would you proceed? If they do not agree then SOL resets.

[fishbjc]

Yah, you will receive a 1099-C, of which you must file with the IRS because they WILL receive a copy of it.  If your debt is $5000 and you settle for $2000, you must pay taxes on the $3000.

Message Edited by fishbjc on 02-27-2008 12:24 PM

[fishbjc]

I'm surprised that Merrick hasn't sold that debt.