fizzala Posted January 14, 2003 Report Share Posted January 14, 2003 I've worked out a settlement with a CA, from 26K down to 6500, its only good until tomorrow and I would have to send the money today, however since I've previously sent them a C&D they want to fax the settlement letter today so they have my check tomorrow. I seem to remember reading somewhere that faxes are legally binding if you have proof of transmission. Would it be better to use a fax service or maybe my accountant. Anyone know? TIA Link to comment Share on other sites More sharing options...
ghacorp Posted January 14, 2003 Report Share Posted January 14, 2003 Go to your accountant. The reason being, this is a very amicable settlement and you would have a trusted third party involved who can vouch for you should other collectors come calling for the same debt in the future. Link to comment Share on other sites More sharing options...
Guest KARENMW67 Posted January 14, 2003 Report Share Posted January 14, 2003 I believe that you have to STATE, in the settlement letter , that they CAN not and WILL not sell to another CA for the remainder of the monies not collected by them.Also you will receive a tax form(depends on tax bracket,what kind of taxes you pay) for the amount that it was reduced by,if I remember correctly. Link to comment Share on other sites More sharing options...
fizzala Posted January 14, 2003 Author Report Share Posted January 14, 2003 the best I could do was for them to say the account will have a zero balance and they'll report it as paid with a zero balance once payment is received. So I wonder how they could sell off an account that they have reported as having no balance? Also I've been told that CA's don't normally send a 1099. If they did my guess is that they could only make it for the difference between what they paid and what received..the amount of write off. I am sure they made something on this or they wouldn't have settled. I don't expect to get a 1099. Its the OC that would have the right since they wrote off a big chunk but then again they sold the account so I don't think I'll get one from them either. Link to comment Share on other sites More sharing options...
Guest KARENMW67 Posted January 15, 2003 Report Share Posted January 15, 2003 I believe that unless you get something stating that the CA or OC wouldn't try to sell off the difference between what you paid and what you settled for,later on with another CA.Maybe Admin can answer what the settlement letter should state.I believe that if you don't get a 1099 they can sell the difference of the settlement.Also did they agree to show PAID AS AGREED with the deletion of any lates?Wishing you the best. [Edit by KARENMW67 on Wednesday, January 15, 2003 @ 06:34 AM] Link to comment Share on other sites More sharing options...
fizzala Posted January 15, 2003 Author Report Share Posted January 15, 2003 It says it will accept the amount as settlement in full, and will report to CRA as a paid account with a zero balance. I spoke to an attorney yesterday and he said he settles accounts for clients and he thought it sounded like a standard letter. He said he also has sent money on faxes alone, sometimes they send a hard copy, sometimes not. BTW the CA did send a hard copy today. Re the 1099, how can the CA send a 1099 when they didn't write off any amount? A 1099 is reported income and since they wrote off zero how can they report to IRS income by me? Then they would have the right to use that 1099 as an expense and a write off on their taxes but that would not be a legal expense since they didn't pay that actual amount at all, but a wayyyyy reduced amount, and in all liklihood they made money and didn't write off anything at all, hence no 1099. Am I making sense? Link to comment Share on other sites More sharing options...
ghacorp Posted January 16, 2003 Report Share Posted January 16, 2003 The original creditor usually benefits when loan losses are charged against profits for the period, and their loss is the amount charged-off. In theory the amount charged-off by the bank would constitute taxable income to the debtor, but I am not sure if 1099 or other reports are generated. You may just wait and see if you are contacted by the IRS. I know of a case a few years ago where someone had nearly $30K charged-off from AMEX, never received anything, then was assessed penalties from the IRS with unreported income about three years later. He later had the amount owed offset by what he had paid a CA. Link to comment Share on other sites More sharing options...
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