Credit Card Hardship Programs?

[Anonymous]

Ok I think that makes me officially one of the myFico.com forum "elite cool kids table" that I've made a contribution to your notes. I'm beaming.

I learned that the hard way, though unfortunately.  Doesn't a charge off mean that a private lender can write it off as a loss on their taxes too? I thought that was their main incentive.  They aren't certainly do it to collect on it from individuals but good ol' John Q. Public will gladly pick up the tab... 

[Anonymous]

Section 166 of the IRS code (I believe, double check me) allows a creditor to take a tax deduction on any debt written-off.

In some rare cases, a creditor can issue you a tax form as income against the chargeoff but this doesn't happen to regularly.

[Anonymous]

Ok, is a write off and a charge off the same thing?  I hear people on forums all the time talking about these forms they are getting about their charge offs.  Apparently I got one too but I never included it in my income return, the IRS didn't check and it was more than 3 years ago so I got away with it.   The lender certainly got someone to pay for it, if not the average US citizen.  They wrote it off, took the deduction, I certainly should have paid it had I gotten it.  The broken system we live in, right?

[Anonymous]

That is what my girlfriend said, she says I don't want to work 7 days a week for years I will hate myself. I am just trying to see if any creditors will allow small mininum payments of like $25 a month or so for 6-12 months so i can get everything figured out. 

How much does Bankruptcy usually cost, and even when i have credit cards that are paid off, due they take those away?

[Adkins]

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@Anonymous wrote:

Section 166 of the IRS code (I believe, double check me) allows a creditor to take a tax deduction on any debt written-off.

In some rare cases, a creditor can issue you a tax form as income against the chargeoff but this doesn't happen to regularly.

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Yes, a 1099-C form. I've gotten one 6+ years ago, for a very significant amount. The only thing that saved me owing on the amount was simply being very poor at the time. 

[Anonymous]

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@Anonymous wrote:

Ok I think that makes me officially one of the myFico.com forum "elite cool kids table" that I've made a contribution to your notes. I'm beaming.

I learned that the hard way, though unfortunately.  Doesn't a charge off mean that a private lender can write it off as a loss on their taxes too? I thought that was their main incentive.  They aren't certainly do it to collect on it from individuals but good ol' John Q. Public will gladly pick up the tab... 

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The requirement to charge off a deliquent debt is to prevent financial companies from "padding" their net worth with such bad debts

[Anonymous]

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@Anonymous wrote:

Ok, is a write off and a charge off the same thing?  I hear people on forums all the time talking about these forms they are getting about their charge offs.  Apparently I got one too but I never included it in my income return, the IRS didn't check and it was more than 3 years ago so I got away with it.   The lender certainly got someone to pay for it, if not the average US citizen.  They wrote it off, took the deduction, I certainly should have paid it had I gotten it.  The broken system we live in, right?

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The idea that taxe writeoffs somehow "pay" for a charge off is a myth. At best its a small consolation in that they simply don't have to pay taxes on the expected profit they would have gotten had it been repaid - they still lost the bulk of the loan. On top of that - if they DO end up getting paid, they have to pay taxes on it in that year they recieved it.

[Anonymous]

Oh I didn't mean to imply that they paid for it in full or anything, but it was in some way an additional consolation to them.  Sorry.

[Anonymous]

So I recently became disabled with a spinal cord injury which resulted in Cauda Equina where I am numb from the waist down. My SSDI monthly income is virtually nothing compared to what I used to make and I am strugling to pay my bills. I have 3 cards with Capital One and wanted to consolidate them so I would have one monthly payment. I was not asking for an interest rate reduction or a cut in my monthly payment obligation. I just wanted to pay my debt in one monthly paymeny. And this company treated me like I was garbage. Instead of consolidating the debt, they increased my monthly payments for each card. Now, as I told them, I am collection proof. All my savings/ivestments went to medical bills. I can default and there is nothing they could do. They did not care. Policy was policy. I must have spoken to 15 people. One guy in the hardship departent, who I could not undertand, hung up on me after confirming he was from another country but said company policy restricted him from telling me what country he was from. During my conversations, I started to record my calls, and informed the employees I was doing this as a matter of courtesy. They all said they were not allowed to talk to me because I was recording the calls and hung up on me !!! What??? They are recording the call, why can't I? So I don't know what to do. All the PR releases from Capital One state they work with their Cardmembers. They are liars. They don't. By not abiding by a simple request to consolidate my balances and allow me to make one monthly payment, they are forcing me to choose whether I buy food or pay them, and for a person whose ethics compel them to make good on their debt, they are forcing me to default. And therefore, 
taking away my self respect. Shame on this company. Their net earnings were $4 Billion in 2017 and they paid NO, NONE, NADA Federal Income Tax. So I go on. I will use my limited energy and considerable expertise in marketing/social media to make sure they are exposed.

[Anonymous]

Pro tip: if you are in a state that requires only one-party consent you don't have to tell them.  If you are in a state that does, you don't have to tell them.  The recording at the beginning says "This call may be recorded for quality assurance purposes."  It does not say by whom.  

I would imagine that the credit card industry is not left completely empty-handed when a creditor defaults.  If nothing else, it causes your score to drop and forces you to pay higher interest to borrow money.  So it's a vast machine that feeds itself first and foremost and always.  Everything else is secondary.