Congrats and THANKS for the INSPIRATION 🌻
Excellent point.....one that a lot of people (or so it seems to me) overlook or are ignorant of (where I am using the word "ignorant" in its classic meaning here....not a dis on anyone). People will settle what looks like lots of debt (with "lots" being relative to each person's unique situation) and then get hammered on their taxes the following year (I am ignorant of how the timing of this happens....so, using "the following year".....no clue as to how long it takes for the 1099 to arrive). I am sure that there are some parameters that must first be met for a 1099 to be sent? Something in the back of my mind tells me that it is $600. So, if you owe a Credit Card company $1,000 and you settle for and pay $250 then you will be subject to a $750 1099 but if you settle for and pay $450 then you would not be subject to that 1099 (because you "saved" $550 and that does not meet the requirement of $600). Can anyone correct/fill-in details?
Just wanted to share that I just settled my last charge off this week, as well as the balance on my repoed auto-loan, and most of my collections (2 from MCM, 2 from PRA). I've been working on paying these of for the past ~8 months, so it feels really good to reach this milestone!
I only have 2 collections (both PRA) left -- which I plan to pay off early in the Fall. Once I pay those, I will be almost debt-free except for ~16k in federal student loans, which I should be able to tackle in the coming year
I wanted to share what each creditor settled for, here are my stats:
Charge-offs / Auto
Creditor Total Owed Settled Amount Settled % BMW FS $11,123.00 $4,500.00 40% Discover It $4,711.00 $2,830.00 60% AmEx $2,535.00 $800.00 32% AmEx $1,299.00 $420.00 32% AmEx $11,590.80 $6,960.00 60% Chase $580.00 $200.00 34% Chase $799.00 $300.00 38% Chase $3,093.00 $1,000.00 32% DFS $784.00 $314.00 40% TD Bank $603.00 $363.00 60%
Agency Total Owed Settled Amount Settled % Portfolio Recovery $1,612.10 $1,146.20 71% Midland Funding $6,291.00 $3,654.50 58% Midland Funding $2,368.50 $1,350.30 57% The Bureaus $679.74 $340.00 50% I.Q. Data $274.18 $274.18 100%
I just made these payments in the past few weeks, so very few have actually updated on my CRs. My scores are stil where my signature currently indicates, but I am looking forward to posting changes and updates here as they happen. I will still have two very meaty Portfolio collections on my report, so I won't see the score bump from no collections at all until I can pay those off later in the year.
Everyone here has been immensely helpful -- I couldn't have done this without y'alls help, so thanks for all the great learning and amazing encouragement
Congrats save somemoney to pay Federal taxes for amounts less than full pay
If a debt is forgiven or canceled, the IRS requires lenders to issue a 1099-C tax form to the borrower to show the amount of debt not paid. The IRS then requires the borrower to report that amount on a tax return as income. Creditors and debt collectors that agree to accept at least $600 less than the original balance are required by law to file forms with the IRS and to send debtors notices as well, something that they must do by Jan. 31.
If you call and speak to someone it goes very easy. Then, after you settle with them, they delete as a normal course. Don't feel like you have to do 100% settlement to get a PFD. I can't remember what percentage I settled at but it was around 50% or so give or take. And wihtin a month, thye were gone.
OC's are MUCH tougher.