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Flipper

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  1. Basically, any cancelation of debt aka debt reduction a card issuer grants is considered by the IRS to be taxable income to you. Unless you can prove insolvency at the time the settlement agreement was made, you are on the hook for the tax. Form 982 should be completed with your tax return and there's a worksheet to help you calculate insolvency (IRS Pub. 4681) - if your liabilities exceeded your debt at the time of the settlement, you should be excluded from some if not all of the tax liability. To your question about whether the amount on the 1099-c is a valid debt: You as the consumer can't be force to both pay a debt and show debt as income. Contact the issuer and if they claim the 1099-C was a mistake, demand to now what the mistake was. If they say there was no mistake but the IRS required the 1099-C, demand to know which IRS code they're relying on. By all means, demand an amended 1099-C be issued before you pay anything.
  2. Bad, bad, bad, bad law. What's even funnier is seeing the looks on union reps' faces when they realize the regulations of a law they lobbied for also apply to THEM. bwahahahahaha! good times!
  3. I am dying to know how you managed to negotiate with a creditor to the point they wound up paying you....I'm impressed!
  4. Thanks again! I feel better now, knowing I've got your stamp of approval The CCCS did have some good information, and I don't mean to be so negative, so, I'll leave my commentary about them at this - they're a great resource to figure out where to start; being in a situation where there is an avalanche unfolding around you is so very stressful, as many here already know - they do a great job of first, finding out what caused the situation and then budgeting needs based expenses before diving into the debt management side of things and formulating a budget for that. I just don't like their terms or the company they keep - I never saw an agreement to review, as we informed them that while we appreciated their help, we were able to negotiate very favorable terms going direct to our creditors...some of these accounts were days away from being charged off, so I'm glad we approached them when we did and managed to salvage our long-term credit outlook. I also have to give huge props to the reps at the credit card companies we dealt with; most notably, Citi, World's Foremost Bank and Barclays. At one point, I was giving the supervisor, who's recently married, life insurance advice (I'm an insurance consultant) while we were working through our account! I have his direct line and he's going to follow up with me on his life insurance situation when he has more information on his employer's plan (lol). Really awesome, dedicated and accommodating people, who made us feel less like the deadbeats we were feeling like at the outset. Non-judgmental and very sensitive to our situation, as well as bending over backwards to help us create manageable repayment terms that would cause us the least amount of harm. I plan to send thank you cards to each of them and a letter of gratitude to their company's CEO/supervisor telling them what great people they have working for them. It makes us feel like our choice of banks to do business with were solid! I think a lot of the success people in our situation experience depends on one's attitude going in...I was pretty dispassionate, calm, but assertive and would ask to speak with a person with decision-making authority if a rep was not able to accommodate all of my conditions...that was only possible after giving myself some time to put emotional distance between the situation and my emotions. We matter-of-factly told them that we are giving priority to those companies who provide us with the most favorable terms...we were also very honest about how we landed in this position, that we incurred the debt and feel that we have an ethical obligation to pay off every dime we charged - it's the interest I wanted to eliminate and was largely successful. I think it's also critical to contact them, instead of making them chase you...that the holidays are approaching was also a plus for us - I don't imagine a ton of people out there are contacting these places looking to throw money at them. I also reminded myself that I was actually the one in the power position, since I'm the one with the checkbook. My husband was totally stunned that I was able to negotiate the terms I did...which made me feel a little less crappy, since I'm the one who ran up a lot of our debt. I also want to thank the experts on this site who helped me figure out which path I should take. I love that people and forums like this exist; I have come here more than a few times over the years and greatly appreciate that I have this invaluable resource, run by such caring people to lean on when I'm in need of information and/or advice. Thanks again, I can't tell you what lifesavers you really are! Oh, and we won't be missing any payments. My husband had platinum credit...his Cabela's card had a $40,000 credit limit...he used it a lot in the 6 years that he had it and paid the full balance every month. He is really out of his element being in this predicament and really struggled with it. Emotionally, he was angry and the stress/unfamiliarity of it all took a huge toll on him, but I think it's been a learning experience for him too...we got through it when events like this usually destroy relationships...I can see why, but it was a great test for both of us. Happy Thanksgiving - I do have a lot to be thankful for this year!
  5. Thanks so much for your feedback, it really helped! So here's an update. We went to the CCCS b/c I wanted to know what kinds of interest rates they have negotiated with these credit card companies as a general rule. Mission accomplished - I told the hubby we weren't signing anything and we brought our own credit reports with personally identifiable info blacked out. We came home, gave it a week's rest, then sat down and discussed our options. Bankruptcy was eliminated as the first option. I was very hesitant to involve any 3rd party in our situation, as I don't trust them to have our interests at heart, or to advocate for it on any level. I then did a lot of research and yesterday, this is what I accomplished - I really need to know if I did this right before we formally sign on the dotted line with the credit card companies: 1. Any creditor who offered a "settlement" was told that we won't even entertain that as an option. No point in paying down debt with an R-9 showing on our credit reports; we'll just walk away from the whole thing. 2. I was able to claim hardship (medical and employment related) with 100% of the credit card companies...below outlines the balances and APR% when I started my calls and the outcome of those discussions: Initial 1. Citi American Airlines - $9,479 balance 17.99% APR ($277/mo open-ended) 2. Citi Shell MasterCard - $3,096 balance 23.99% APR ($65/mo open-ended) 3. World's Foremost Bank (Cabela's) - $19,200 balance 15.18% APR ($700/mo open-ended) 4. Barclay US (Williams-Sonoma) - $9,600 balance 17.74% APR ($280/mo open-ended) Negotiated 1. Citi American Airlines - $9,400 balance - 0% APR ($154/mo x 60 mos) - "closed by consumer" - "paying as agreed" (re-aged immed) 2. Citi Shell MasterCard - $3,096 balance- 0% APR ($58/mo x 54 mos) - "closed by consumer" - "paying as agreed" (re-aged immed) 3. World's Foremost Bank - $19,200 balance - 0% APR ($331/mo x 55 mos) - "closed by consumer" - "paying as agreed" - (re-aged eff immed after we paid $993 good faith) 4. Barclay US - $9,600 balance - 2.9% interest - ($203/mo x 40 mos) - "closed by consumer" - "paying as agreed" (will re-age in Jan 2016) So as of right now, I've got our monthly payment on those four down to an average of $678/mo (some balances will mature more quickly than others) over a 60 month term. The monthly pmt for the first 40 months will be $746/mo...once the Barclays card matures and that's paid off, we'll use the $203/mo savings to accelerate the maturity date on the remaining three cards. We sold one of our classic cars, so we are going to pay off the two cards below in very short order - that is why I'm not including them in the long-term payoff cards above. We made $24,000 on the sale of that car, so we are investing it (hubby's a portfolio manager) and making the agreed payments on the 0 interest cards in the interim. Late fees and penalties waived We have two other cards, one of which I'm in process of negotiating - it's our Crate and Barrel cc issued by Comenity Bank (they SUCK!)... 5. Comenity Bank - $1,818 balance - 26.99% interest Think we're going to go with the 10% APR interest offered, but not before I beat them up some more and make sure it's re-aged, listed as "closed by consumer" and "paying as agreed" on our CRs...then we'll pay it off in 6 installments, but let them negotiate out longer payment terms... 6. Chase Slate - $3,030 balance - 0% Introductory APR that expires in June 2016 - We are not going to claim hardship on this card - we plan to pay off full balance by the time the 0% interest term expires and keep the card open as-is with a $3,500 credit limit. We need a card, after all - good luck renting a car without one. So all told, we have $42,000 in debt on four cards. We will pay 2.9% interest on $9,600 of it and the rest is at 0%. We will keep one of our cards with a modest, manageable CL open, the rest will show that WE closed them due to the change in our financial circumstances and that we are in good standing with the creditors. Then I will send a letter for each of these TLs citing hardship for the reason why we had lates and decided to close the accounts. All were paid as agreed and in good standing prior to our situation and then we had a period of 60-90 days late on them - with this arrangement, we have brought all accounts current and going forward, will continue to pay timely. I hope that I haven't missed anything MAJOR here and that these negotiations reflect positively on our CRs for potential creditors down the line. Had we gone with a CCCS, this is what would have happened: 1. Debt Settlement Total Debt: $48,846 Est Avg Settlement: 43.15% Total Settlement: $20,214.06 DMP Service Rate: 15% (based on TOTAL debt, not settlement amount) DMP Service Fee: $7,026.90 Total Amount of Settlement & Fees: $27,240.96 Total Monthly Payment (based on 42 mos) = $648.59 $19,605 debt forgiven would be taxable income and we'd receive a 1099-C - unless insolvency at the time of settlement could be proven, we'd be on the hook for that. We would owe the IRS $4,901.25 in tax (est 25% tax rate) on 4/15/2016, our credit destroyed with numerous "charge offs" listed for amounts forgiven...NOT worth it. SO: Total settlement + tax liability = $32,141 with trashed credit. And the potential for being sued b/tw the time they start negotiating debt and the time they raise the capital to fully fund the settlement amount. Oh, and additional interest/penalties that accrue as well as late payment and/or charge off risks. NOT worth it for us. OR 2. Debt Management Plan Total Balances: $46,846 Sum of Interest: $12,649.91 Total DMP (incl. DMP monthly fee $50) $62,495.91 Monthly Pmt: $1,057.20 Terms: 60 mos. CCCS also gets 10% from credit card companies, which ups their take from $3,000 to almost $9,000. To destroy our credit rating...really?!?! We would not have gotten 0% APR on any of our credit cards...we would have been hit with significant enough interest to make the payments and total debt higher than what we negotiated. We were adamant that the principal remain what it actually is - we were only negotiating on interest. Accounts would be shown as "closed by bank" ... bad, bad, bad. Why bother paying anything then? The CCCS we were talking to is funded by Bank of America, Citicorp, and various grants from HUD, etc/private foundations. I think that is a huge conflict of interest; banks funding these places, "negotiating" terms with them and then giving them a 10% kickback. WTF! I point blank asked her where their funding came from and at no time, did she ever once disclose that they receive funding from any of these banks. Synopsis By negotiating the terms ourselves instead of going with a DMP arranged by a Consumer Credit Counseling Service, we are saving: $265/mo avg. over a 60 month term Total Savings: $15,880 Barclays (with 2.9% int), Chase and Comenity total about $15,000 - instead of giving the CCCS that money, we can use it to eliminate three of our cards' balances in full while keeping one of them open. Accounts are re-aged immediately Accounts show "paid as agreed" Accounts show "account closed by consumer"
  6. I found a local, NFP 501(3)b CCCS (Consumer Credit Counseling Service) on the website where my son attends high school. This is a local resource listed as a source of support for area families. Link to the site is at the bottom of this post. Seems legit and the terms appear to be very fair. Has anyone heard of CCCS and if so, any ideas as to what kind of success rates people achieve using a NFP service of this nature? From what I'm reading, it's a go-to for the county and state where I reside. They are part of a national network of consumer credit counseling services. We are at around $45,000 in cc debt, I just lost my job, as I need to be home more with my special needs child, was traveling 130 miles r/t on a daily basis for a commute and my employer wouldn't work with me so that I could work some days remote and some in the office each week. I can work locally part-time to help us pay debt down, no problem. We have a classic 1969 GTO that we are willing to use as collateral to obtain a personal loan, a '67 fully restored GTO that, uh, is not going to be used as collateral or sold - my fiancé has owned that car since he was 17 (he's now 50)....and he's not parting with it or risking losing it for any reason or any one. BK is not an option - he's a portfolio manager for an investment bank and his position requires FINRA licensing that would be summarily yanked if he filed for bankruptcy...debt consolidation is pretty much our only option and we want to pay our debt down, we were certainly more than willing to run it up. This is more my doing than his...Williams-Sonoma has some really great stuff!...he's handled it like a trooper and so I'm trying to come up with the best solution that will cause him the least amount of stress...the good news about me being at home is I have the time to deal with this for us. Thoughts and feedback would be greatly appreciated. Thanks all! https://p9.secure.hostingprod.com/@illinoiscccs.org/ssl/faqs.html
  7. Still fighting with LVNV/Credit One, et al. Credit One has sent me letters confirming that they "sold" my account to another entity...yet, Credit One continues, like clockwork, to "update" this account with the credit bureaus every month, even though it shows N/A in the amount due field and also indicates it's been sold... is this kosher?
  8. Contact PG&E and offer pay for delete. I had a balance with the IL Tollway and they also contracted with NCO Fin. I struck a deal with the Tollway for 10% of the debt....paid it off directly to the Tollway. Then I disputed with the CRBs....NCO was deleted. Try that. and good luck!
  9. If you're disputing a debt with the CRBs, the creditor has to reply to them, as they should be replying to your DV requests. As for the rest of it, everything I've read indicates that they should not be engaged in any sort of collection or derogatory reporting information while the debt is in dispute. Most of them ignore this from my experience...and I wouldn't sue on those grounds alone...I'd certainly use it to show a judge what unethical scumbags they are tho if I had other items on the punch list to drag them into court over.
  10. That is correct...Resurgent validated...on an otherwise blank piece of paper, some b.s. that I quoted above...the DV letter is not even on letterhead. However, the accompanying letter, which was on Resurgent letterhead shows the following: Previous Creditor: CREDIT ONE BANK, N.A. Current Creditor: LVNV Funding, LLC Same exact account number as the OC, Credit One Bank, no mention of debt being assigned or sold to LVNV by Sherman Financial after "purchase" from Credit One. I have disputed the LVNV Funding TL directly with the CRAs. At least twice already, with a third letter being sent to the CRAs asking for MOV since LVNV has yet to validate. To be clear, I am merely setting the stage to sue. If they delete, great...but this outfit is so sleazy, I think it's time for the IL Department of Professional Regulation to take more than a passing glance at their business practices.
  11. I'm thinking I need to write to Resurgent one more time, because after re-reading this: "LVNV Funding, LLC currently owns account number ************-3745. The account was previously sold by CREDIT ONE BANK, N.A. on or about 03/12/2009" It doesn't state to whom the account was sold on or about 03/12/2009. I want them to claim LVNV bought it...and I want it in writing so I can slap them in court with Credit One's letter claiming the debt was sold to Sherman Financial.
  12. Is it relevant or irrelevant that LVNV is the entity reporting on my CRs and they have yet to directly reply to my DV requests? Resurgent is their "servicer"...yet LVNV is the one who allegedly verified with the CRBs. So as of right now, LVNV has not validated. They also claim that LVNV Funding, LLC bought the debt from Credit One Bank, N.A. - however, Credit One Bank asserts that the debt was sold to Sherman Financial. hmmmm. That seems to not be passing the smell test...unless they plan to just simply come out and admit they are all the same company!
  13. Thanks for the clarification above of the Trice verdict. LVNV, Northland Group & Resurgent are all licensed in the State of IL under the professional category of "Collection Agency"...not one has "factoring company" showing and they applied for the license using collection agency as their line of business. I am licensed in IL as an Insurance Producer by the same agency that licenses the aforementioned scumbags...the rules are clear...you cannot advise on any line of coverage other than what you are authorized to by virtue of your licensed specialty...in my case, my lines of authority are Life and Health and I can't advise on other lines, such as property/casualty without the appropriate license. This is where I think I've got them, along with their other generally shady behavior. I plan to sue them, just because they are such scum. I've emailed an NACA attorney here in Chicago and we'll see what response that yields.
  14. Okay, update. Checked the mail today, after I sent 6 CMs out. Resurgent, "servicer" for LVNV, sent me a validation letter (after they claimed amnesia in late June). The validation states the following, "LVNV Funding, LLC currently owns account number ************-3745. The account was previously sold by CREDIT ONE BANK, N.A. on or about 03/12/2009 and at that time, the balance on this account was $348.97. As of the date of this communication, the account balance is $509.77. Because interest, payments, credits, fees, and/or other permissable charges can continue to cause the account balance to vary from day to day, you should contact us at 1-866-464-1187 to determine the exact balance." So Credit One Bank, sent me a letter stating the account was sold to Sherman Financial, not LVNV. In a letter dated 5/27/2011, I received a settlement offer from Northland Group listing their client as LVNV regarding Credit One Bank and showing a current account balance of $430.04. First, is that validation letter acceptable by most standards? Second, what should I be doing about Northland?
  15. I've read it...and I needed a drink and a nap afterward. I also have a settlement offer letter from Northland Group out of MN (DV on its way!)...yet another subsidiary. So now, as I save all the correspondence, there are two entities in two states attempting to collect the same debt, showing different amounts as the amount due. I plan to also gather all correspondence and file complaints with the IL AG and IL Department of Professional & Financial Regulation. Neither Sherman or LVNV have been disciplined in IL...which I find ODD, insofar as a case LVNV was involved in here was dismissed as they were found guilty of criminal acts by attempting to collect a debt without being registered here. They registered on 8/28/2008. IL considers LVNV a collection agency...now, how is it that two other companies are contacting me on LVNV's behalf and that's kosher? There simply has to be a way to nail them on this basis if for no other...Thoughts?
  16. I agree with what you're saying...I am including the CRAs in cc communications primarily so they cannot come back at any time and state they were never informed of these inaccuracies. I don't plan to pursue legal action against the Big 3 ... I have memberships with all three and tend to get very good service when I call them. Possibly they will see these communication pieces and simply delete (that's my hope, anyway). Can't hurt to try. For the purposes of this exercise, the Big 3 are being asked for MOV, as none of the creditors they have "verified" have validated the debts in have in fact, stated the debts are no longer in their possession....trying basically to nail the CAs in a roundabout way.
  17. If they initiated collection activity prior to 8/28/2008, the debt to them is VOID... According to Trice, LVNV obtained a license to act as a collection agency on August 28, 2008 in IL..... more about the ruling here: excerpt from the IL Appellate Court reversal of the original judgement: "OPINION When an unregistered collection agency obtains a judgment against a debtor, does the lack of a license make the judgment void, or merely voidable? The trial court here said it made the judgment merely voidable, so that the debtor’s failure to raise the issue before entry of the final judgment left him with no recourse. We disagree. We find that our legislature’s criminalization of an unregistered collection agency’s collection of a debt establishes an intent to void any judgment entered in favor of an unregistered collection agency. Accordingly, we reverse and remand." Oh, and PS? Here's a nice little passage in the Collection Agency Act in the State of Illinois: Section 1210.260 Unprofessional Conduct a) The Division may suspend or revoke a license, refuse to issue or renew a license or take other disciplinary action based upon its finding of dishonorable, unethical or unprofessional conduct within the meaning of Section 9(a)(31) of the Act, which is interpreted to include, but is not limited to, the following acts or practices: 1) Doing business under a designation or business name or identification that misleads creditors, consumers or the general public to believe that it is an entity other than a collection agency; hmmm, would listing oneself as a FACTORING COMPANY possibly be construed as misleading? HMMMMM? and MORE interesting info for my fellow Illinoisans: The Division has determined that a reasonable collection fee under an agreement between the debtor and the creditor shall not exceed 29% of the principal balance. So the principal balance with Credit One was $250 (without any verification to go on other than my CR)...LVNV is reporting $510...now, 29% of $250 gives LVNV the right to adjust the balance to $322.50...again, they are reporting $510...I'm thinking it's time for a formal complaint with the ILDPR based on the facts that they are listing themselves as a Factoring Company (they are an effin' collection agency!) and reporting debt that far exceeds the legal maximum in the State of Illinois. Am I on the right track?
  18. Hi all, Thanks to you and your advice, today I spent the better part of my afternoon sending MOV letters to Equifax & Experian (with all corresponding documentation), with more MOV letters to be drafted for TU....I also sent replies not only to Midland, but to LVNV/Resurgent/Credit One Bank as well. Amazing how these places all seem to develop amnesia the second a DV letter appears on their doorstep! The Midland situation is relatively cut & dry...LVNV is quite another story. I dv'd LVNV and sent a 623 to Credit One Bank last month after I disputed with the CRAs and they verified. Credit One replied and stated they sold the debt to Sherman Financial (okay, but still not an acceptable response)...I received a separate letter from Resurgent stating they are the servicing party for LVNV. Neither Resurgent nor Sherman have ever sent a demand for payment or reported to any CRB. This has been all LVNV and Credit One from the start. For that reason, I did not DV Sherman Financial, as they have never contacted me and without that involvement, I feel it's irrelevant to contact them at this time. I did cc Resurgent on the 2nd request for DV I sent to LVNV today since they have inserted themselves as an active party with regard to this account and I sent a repeat request to Credit One Bank for an investigation. I would need to DV Sherman Financial whereas I am sending a 623 to Credit One as the original creditor. Then I sent all of that crap along with the documentation from both Credit One and LVNV showing non-compliance, with an MOV request to Equifax asking them for proof of how they have been able to verify this debt three times and I have yet to be able to verify it once, since neither party they've contacted claims they have any knowledge of this debt at this time. Closed it out by demanding they delete both Credit One and LVNV reportings from my credit file. I plan to also send MOV to Experian (for Credit One/LVNV) and TU (for Credit One/LVNV and Midland) on Monday. I simply ran out of time after compiling letters, copying, scanning and filling out green cards...I'm exhausted! *Edit* I'm thinking I might have a way around this maze that is Credit One.... Credit One states they sold the debt to Sherman Financial. Sherman Financial has not contacted me to collect and that's probably because they are not a licensed Collection Agency or Coll Agency Branch Office in the State of Illnois. However, LVNV and Resurgent are both licensed, both current until 5/31/2012. So basically, these two are assuming collection activity and unless they state Sherman sold or assigned the debt to them, they can't continue collection activity, as the debt belongs to another entity, as stated in writing by Credit One Bank, the OC. What I'm trying to do at this point is remove LVNV/Resurgent from the picture and force Sherman Financial into the picture as an unlicensed collection agency and as a means to get this whole thing deleted off my CRs.
  19. these suggestions are perfect! Thank you for your feedback and I'll post more as events progress! xoxo!
  20. Disputed a collection TL reported by MCM on my Experian CR...Experian updated (in other words, claims they validated)...MCM sent a settlement offer to me in a letter dated June 24, 2011...THEN sent a "we need more information from you, such as a contract with the original creditor" on June 29, 2011 (aren't they admitting they don't have that information by requesting it from me?)...they knew the account well enough when they sent the settlement offer and on the "we need more info" letter, they referenced the same account number...this seems like a bit of a game they are playing with me...what should my next move be? Go back at the CRA with MCM's b.s. letter and ask for MOV? This is all over the place and I don't know which move I should make next. Any help would be so greatly appreciated!! Thank you! Flip
  21. lol, I got your gist! Sorry for the delayed reply, was out of town this weekend. I paid Verizon timely until 7/2009...they are showing the account as a C/O as of May 2008...lol. But then state first major delinquency in July 2009...they were really sloppy when they reported this. You mentioned Pinnacle out of MN...funny, but Verizon shows a Verizon Collection office out of MN as well as Schaumburg, IL...I wonder if the MN Verizon isn't actually, Pinnacle?
  22. And by the way, I can prove that I was never late on this account between April 2008 and July 2009...I did everything, including payments, online and have email confirmations from Verizon for each and every payment I made to them, so I can prove they are falsely reporting information to the CRAs. I just don't quite know how to proceed since this is still within the 30 day investigation window and I am not sure if they can or can't pursue collections during this time frame...however, the file is listed as "disputed" on my CR as well. Again, I tend to think they are out of line legally here; I just don't know which step to take next. I don't make threats...I act or I don't. If these are litigious violations they have committed, I will sue them so fast their heads will spin...no debating it. If it's questionable, then I would rather use alternate methods with them...just need some guidance from more experienced people here...as far as I am concerned, Verizon has just joined the list of business scum along with the likes of LVNV Funding, etc.
  23. And so are the CRAs, since the inconsistencies are obvious on my report and they "verified" this? Really?
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