sifxpert

Having problems settling your credit card?

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sifxpert: You know it just occurred to me. With the new changes to the 1099c reporting published by the IRS...see...

http://www.irs.gov/pub/irs-pdf/i1099ac.pdf

...since your fee comes out of the "forgiven debt" for a debtor, is it included in the portion that a debtor has to pay taxes on?

In other words, if you charge $10k to settle $60k for only $20k, what part is taxable?

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2. I'm not understanding this one...you have never seen 40% or you have never seen a CC ask to see other settlement letters before going down to 40%?

a) most creditors will settle for 40% on the average.

Never seen a 40% (but readily admit that I haven't seen everything. ;) ) Also, most CC want to see other settlement letter before they will go below 75% settlement.

B) some creditors will ask to see letters from other companies when you call and say "well, MBNA offered me 30% or Providian offered 40% so why won't you go doen to 40%?" they then say well send a letter that reflects that amount and we will consider. They are trying to call your bluff...happens often.

I've had many that refused to budge below 60% - and have said (in a rude voice) that their tax deductions are equal to 60% of the balance so why should they bother. 60% is actually correct as far as the tax deduction in some cases (profit and loss deductions).

3. I agree that Credit Unions are very good. Some are not but for the most part I agree they do business very professionally. I do not remember a time where I posted anything negative about credit unions. I do recall a post where I mentioned something that credit unions are one of the only institutions allowed to touch money in another account if you default on a loan...not that this is a bad thing for them to do but, doesn't it suck when you go to the bank and nothing is there?

I thought you were recommending against them. My bad if I misunderstood.

I apologize if you feel I misrepresented something here. I do appreciate any constructive criticism. I want nothing more than to keep my words as accurate as possible since they may have a serious adverse effect.

Don't EVER be afraid to call me out on something - I do make lots of mistakes and the credit information world is an ever moving target. I appreciate all of your info.

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You should have hired me to settle your accounts then!!! :D

I've read quite a bit here that people are having problems getting low settlements with creditors I have no problem getting 25-40% every single time. The statement, anyone can settle their own accounts is definitely true but the statement "you can do the same on your own" is not true.

I settle in bulk so perhaps, settling multiple accounts at the same time helps. This is why I offer contact info for creditors I deal with on this forum. Also, many times people will simply call the regular customer service numbers who read frrom a script and will never offer anything lower than 60%. Especially when dealing with Naji from india who calls himself Robby.

Also, the best time to settle is between 150-180 days delinquent or just before charge off for those who charge off at 120.

There is an art to settling debts and there is certainly an art to staying on top of all the changes in the industry which consumes almost every second of me time. Generalizing creditor policies is foolish which is what prompted me to join this forum...I noticed too many people having problems with Citi and all the advise was directed toward the DV process. The DV process will get you sued.

Anyway, I appreciate this forum very much. I enjoy being able to help and please do call me out on anything too anytime...I'm far from perfect and I too learn quite a bit.

Take care!

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You should have hired me to settle your accounts then!!! :D

Is that subliminal advertising I detect? :hmm:

:p

I noticed too many people having problems with Citi and all the advise was directed toward the DV process. The DV process will get you sued.

The DV process itself will not get you sued. An OC who litigates to seek relief gets you sued.

We all know that CITI and Discover will litigate through an attorney if you owe them money - that does not mean you should relinquish your right to DV a third-party CA under Federal Statute. It is, however, safe to expect a summons if you owe CITI or Discover money.

Understand though that DV'ing when dealing with these two specfically is only a technicality as the plans for litigation is already in the works....

That I think is a better way to put it. :wink:

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there are threads on this site with contact info for all 3 of these accounts. If not go to bud hibbs website. I would not settle any of these accounts. I would dispute them all. The OC's may not come off very easily though. BUt at least you can get the JDB's off fairly easy.

Have you had any success with settling charged-off accounts....or do you now of any successes with settling charged-off accounts?

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I want to settle with MBNA - they have already charged off, SOL is expired. They are reporting zero High credit, limit, charge-off amount, balance, and amount past due. I just want this OFF of my credit report (How is the best way I can negotiate a PFD?)

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If its SOL, chances are its already been sold to a JDB. How does your CR actually read? "Charge off" or "Charge off / sold to another lender"?

If its SOL and you're in Wisconsin, its against state law for them to report it. In other states, the best you can do is write them CMRRR pointing out that they're violating the FCRA by reporting an uncollectable debt. Note: this doesn't always work.

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I want to settle with MBNA - they have already charged off, SOL is expired. They are reporting zero High credit, limit, charge-off amount, balance, and amount past due. I just want this OFF of my credit report (How is the best way I can negotiate a PFD?)

I would dispute directly with the CRA. I would not settle unless I had to. JDB accounts are too easy to delete or to catch in the DV process on a violation to get a $0.00 settlement.

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What about CC that are already charged off?

I find it much easier to settle some accounts with 3rd party collectors than 1st. Specifically Citi. You must be smart when negotiating with 3rd parties because they are very sneaky. You must get everything in writing and the settlement letter must state no further obligation, settled in full.

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You should have hired me to settle your accounts then!!! :D

Is that subliminal advertising I detect? :hmm:

:p

I noticed too many people having problems with Citi and all the advise was directed toward the DV process. The DV process will get you sued.

The DV process itself will not get you sued. An OC who litigates to seek relief gets you sued.

We all know that CITI and Discover will litigate through an attorney if you owe them money - that does not mean you should relinquish your right to DV a third-party CA under Federal Statute. It is, however, safe to expect a summons if you owe CITI or Discover money.

Understand though that DV'ing when dealing with these two specfically is only a technicality as the plans for litigation is already in the works....

That I think is a better way to put it. :wink:

Sorry doc,

I'm trying to think of a clever Zuker Bros quote here but I'm at a loss.

Anyway, I use the DV process for 90% of collection accounts. I get $0.00 settlements all the time even on larger accounts up to 10k with numerous violations with a simple ITS letter. I strongly advise the DV process for anyone but again, you must look on this board and do your due diligence to investigate that the creditor you plan to DV is not one who will initiate a lawsuit upon reciept of a DV letter. Really, Citi is the only one who will file every time.

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If its SOL, chances are its already been sold to a JDB. How does your CR actually read? "Charge off" or "Charge off / sold to another lender"?

If its SOL and you're in Wisconsin, its against state law for them to report it. In other states, the best you can do is write them CMRRR pointing out that they're violating the FCRA by reporting an uncollectable debt. Note: this doesn't always work.

What's the difference between "sold to another lender and charge-off?

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Okay, for the OCs it says "Account transferred or sold, Charged off account." on one, and just "Charged off account, Account closed by credit grantor" on a couple others. One says "Profit and loss writeoff." First off, what does JDB stand for?

Some of these accounts have CAs assigned. I know how to deal with them (in the DV process right now). I'll make them violate the FDCPA by verifying a debt with the CRA a couple times before they validate with me and then send an ITS letter with a draft complaint with a settlement offer of "you delete, I don't sue." Several of these CAs are arguably in violation by just looking at my report (re-aging, two accounts from one CA, for example).

However, what of the original creditors? I need these DELETED or changed to PAYS AS AGREED as I am applying to be admitted to the Florida Bar, and need to have clean credit for the background check.

Even though they have ZERO balances, the Bar will still see that as bad.

I am trying to use the FACTA method (of having them verify with the CRA and then requesting the results of that verification, to show willful violation of FCRA 623(a).) but if that doesn't work, I will need to PFD. My report has to be clean before May.

How do I get them to either be deleted, or say "paid as agreed, account closed by debtor"? Will I have to pay them the full balance?

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Okay, for the OCs it says "Account transferred or sold, Charged off account." on one, and just "Charged off account, Account closed by credit grantor" on a couple others. One says "Profit and loss writeoff." First off, what does JDB stand for?

Some of these accounts have CAs assigned. I know how to deal with them (in the DV process right now). I'll make them violate the FDCPA by verifying a debt with the CRA a couple times before they validate with me and then send an ITS letter with a draft complaint with a settlement offer of "you delete, I don't sue." Several of these CAs are arguably in violation by just looking at my report (re-aging, two accounts from one CA, for example).

However, what of the original creditors? I need these DELETED or changed to PAYS AS AGREED as I am applying to be admitted to the Florida Bar, and need to have clean credit for the background check.

Even though they have ZERO balances, the Bar will still see that as bad.

I am trying to use the FACTA method (of having them verify with the CRA and then requesting the results of that verification, to show willful violation of FCRA 623(a).) but if that doesn't work, I will need to PFD. My report has to be clean before May.

How do I get them to either be deleted, or say "paid as agreed, account closed by debtor"? Will I have to pay them the full balance?

I need the same.....I have 2 credit card accounts that I had for 5 years with no late payments...due to job loss, the were charged-off. I am willing to do a PFD as well. I have sent the OC settlement letters but they continuously refer me to the CA. I am at a stand still........

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First "charge off" by itself is just an accounting term that means "charged against profit and loss" for income tax purposes. An OC can list an account as CO and still retain ownership...which means they can continue to charge interest and penalites.

On the other hand "sold to another lender" means the OC has officially closed the account on their books (their TL on your CRs should read $0 balance) and sold the right to hassle you to another lender, a junk debt buyer for pennies on the dollar.

Once an account has been sold, it almost impossible to deal with the OC. Some...but a very very few...will buy the account back and settle with you, but that's very rare.

IMHO, I suggest that if an account has been sold, you call the OC and demand a 1099c for the account. You are basically verifying that the debt is yours and the IRS will expect you to pay taxes on the balance, but, it will protect you from further hassle from the JDB. And, unlike a JDB, the IRS will take payments.

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The question is, how do I get the OC's TL off of my account once they have sold it to another lender? All balances are zero. Can I pay the OC? I just need it removed. Does the JDB have the power to remove the OC's TL?

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rp0029: Honestly, I'm not sure. There have been some court cases (which of course I can't find right now) that found for the defendant that once a creditor has "written off" the debt and issued a 1099c to the debtor, the debtor must claim it as income, and the debt is therefore considered "satisfied".

So...logically...if the OC gives you a 1099c, the CA is violating the FCRA by reporting an uncollectable debt, and therefore should remove their TL. The OC's TL will remain.

Will this prevail in court? I don't know...I've been trying to find some legal precedent that says one way or another.

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I'm into Citibank for $900, the acct has been delinquent for over 3 years, although they only charged it off a year ago. I want to settle, they offered my 75% early on and have never budged from that amount.

I am adament that I will only accept a "pay for delete", no matter how I word it, they refuse to accept! I haven't made contact with them in over a year (i used to only call them every 6 months or so to try and settle). EVERYTIME I call they are so rude and uncooperative (Kansas City office). The problem (i think) is that I have given them the (truthful) impression that I have the means to pay any amount.

I want to call/write them now and try and work something out. The SOL runs out in 1 yr, and it falls off my credit report in 4 yrs. The truth is, I will settle for 75% IF they will delete it. This Citi acct is the sole blemish on an otherwise spotless credit report. I don't know what to do with these people. PLEASE HELP!! ANY ADVICE OR THOUGHTS WILL BE DEEPLY APPRECIATED!

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CC OC's rarely do PFD Technically, its against the CRA rules and may get them barred from reporting (yeah...right).

Anyway...do a PM to sifxpert. He claims to know how to deal with Citi. He claims he has settled accounts with them...I don't know if those included PFD.

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I'm into Citibank for $900, the acct has been delinquent for over 3 years, although they only charged it off a year ago. I want to settle, they offered my 75% early on and have never budged from that amount.

If that's true, then something's waaay wrong. They are supposed to charge it off no later than 180 days after you last pay - by law.

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It's not an IRS rule. It's the FDIC Uniform Retail Credit Classification and Account Policy. :wink:

The Uniform Retail Credit Classification and Account Management Policy establishes standards for the classification and treatment of retail credit in financial institutions. Retail credit consists of open- and closed-end credit extended to individuals for household, family, and other personal expenditures, and includes consumer loans and credit cards. For purposes of this policy, retail credit also includes loans to individuals secured by their personal residence, including first mortgage, home equity, and home improvement loans.

http://www.fdic.gov/regulations/laws/rules/5000-1000.html

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Geeesh...I've got a headache.

I think we may have a disconnect going here...

As I read the link you posted, the FDIC rules only apply to FDIC banks which only cover about have the banking institutions in the US. Even so, these rules only cover "charge off"...not "write off", although I do think there's another section of the law that does mention "write off". But again, only for FDIC insured banks.

So...for NON FDIC institiutions that issue unsecured debts, the IRS rules would seem to be the governing documents. And, as someone else mentioned, its not at all unusual for one part of the government to have regs that directly conflist with another part. Problem is, it the IRS that most of us poor debtors get to deal directly.

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