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Help! Settlement!


sacs15
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Ok so i'm looking to settle a debt with Bank of America. Does anyone one have an example form of an offer letter? At what percentage amount of the debt should I offer to settle? I would like to make a decent offer and try and avoid a judgement. Also, what else should I write in the offer so that I don't get 1099'ed the amount forgiven and that I don't have the amount forgiven sold to another company? Is there anything I can write in the offer so that the account is completely removed from my credit report as well? Any help would be greatly appreciated. Thanks.

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I am offering to settle this debt on the following terms:

1. $X furnished in certified funds by xx/xx/08.

2. No forms 1099 shall issue for any balance forgiven.

3. BofA shall not re-sell any remaining balance.

4. BofA shall delete the tradelines that are being reported to the 3 CRAs and/or shall not respond to any disputes debtor files regarding the tradelines.

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2. No forms 1099 shall issue for any balance forgiven.
I'm not absolutely sure on this...and it would probably take a tax court to decide...but...I don't think an OC has a choice here. In order to claim the "loss" on their P&L, they have to document it for the IRS. While that might not actually be issuing a 1099c, it still amounts to "found income" for the debtor. That's why the IRS rules say whether you receive a 1099c or not, you're supposed to claim the income and pay the taxes.
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How far are you behind? That makes a difference. If you are four months behind, they will frequently call you and offer to settle for 30% of the balance. I don't remember the exact details of how much time they gave me to pay, but it was at least a year. But they don't give you much time to decide. If you don't agree, they sell it to a CA. Someone like Portfolio or Eskanos and Adler. It is important that you meet their deadline. If you don't, there is not a further call from them - it goes straight to the CA.

A number of people have posted here that they got the same offer I got. It seems to be the standard BOA offer.

If you are just a month or two behind, they will not settle. It seems like four months is the magic number.

As far as the 1099, try saying that the amount owed is in dispute, and that you only agree that the amount you offered is the amount due. If they agree to that, then they should not file a 1099.

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Add another line: This offer is made in the spirit of compromise and shall not be considered an admission or concession by me.

I'd send it to the BoA's CEO with a copy of your check. Send it Priority Mail with delivery confirmation. Likely, then, it will be handled by the executive correspondence people and not some schmo in collections.

Give them a reason for why they should take your offer.

Even if they do take it, expect it to remain on your CR, you will have to fight that separately, and expect to get a 1099 if the difference is 600+. As Willing said, it is actually your obligation to report it as much as it is BoA's to 1099 you. Thank GW, Harry Reid and Nancy Pelosi for that.

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