I have an old Elan account charged off in 2015-2016 that is still reporting as late every month so I was looking into settling with them. The balance was roughly 6k. I found an old settlement offer from 2017 from them for a single payment of $1600. However, I noticed the fine print read "upon successful completetion of the settlement agreement, we will no longer attempt to collect on this debt. In addition the status of your account and the amount of the cancelled balance that will remain charged off will be reported to the credit bureaus." It also says if the amount cancelled is >$600, they will issue me a 1099c.
If I'm reading that correctly, it is saying that if I pay them the $1600 and they wont come after me for the rest but will still have my CR reports show a CO with a balance remaining of $4400? But, at the same time will tell the IRS they forgave the $4400? I've never heard of a settlement offer like this before. Am I reading that fine print correctly? I understand the 1099c but shouldn't the remaining balance then be reported as zero if they tell the IRS they decided to take a loss on the $4400?
In my experience, settlements report a $0 Balance and “Settled For Less Than Full Balance / Charge Off. Then it’ll still show the payment history (30 60 90, CO, .etc)
Thank you for the replies. I logged into their settlement website and now, unfortunately, the setllement offer has gone from $1600 to $4900. I guess I'll be waiting on this one for awhile.
