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They have accepted my offer, however...


FLYINGHIGH
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Hi, first I would like to thank everyone on here for your advice and guidness. You truly help people against these nasty CA's.

I recently made an offer to the CA that is dealing with my $11,000 debt (which is in judgement). They accepted my offer of $7000.00 which is done through mail so I have a paper trail. However in the letter they added something that does not sound right to me.

This is waht they added in the offer acceptance letter it states.. Pursuant to Internal Revenue Code section 6050P, if your account has a remaining balance of $600.00 or greater after the settlement is completed:confused: the creditor is required to report this amount to the Internal Revenue Service and you will recieve a Form 1099-C from the creditor no later than next January 31.

Could someone tell me why I would even have a $600.00 balance if the $7000.00 would - as they put it in there letter " be a complete and total satisfaction of the judgment entered against you":?:

Thanks for your help

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Well, if you have already admitted to the debt, there is little you CAN do than try to settle. Most likely when you settle the DOLA will change to the day you settled. Therefore this judgement will be reporting for a LONG time.

Just curious, how in the world did a JDB get a judgement against you in this amount?

I would get EVERYTHING in writing, and only settle if it's on YOUR terms, as it will not positively affect your credit in any way.

Good luck....

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The group I am dealing with says they are a Law Office here in Florida. However they say they are a debt collector and they have a judgment on me. I have tried to deal with the OC back a couple of years ago but they told me the debt is in the hands of this CA/Law Office.

I have gotten a settlement agreement finally after many attemps for the amount of $7000.00 all in writing.

My question is what does this mean in the written agreement; Pursuant to Internal Revenue Code section 6050P, if your account has a remaining balance of $600.00 or greater after the settlement is completed the creditor is required to report this amount to the Internal Revenue Service and you will recieve a Form 1099-C from the creditor no later than next January 31.

I do not want to pay the $7000.00 and then find a letter in the mail from the IRS six months later stating I owe the remaining balance. Thats what it sound like to me. Is there anyone that is aware of the Internal Revenue Code section 6050P?

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The balance the CA is writing off is greater than 600 dollars. Thus they are telling you that they are going to report the 4000 that is the differance between the judgement and what you are settling for, as income to the IRS. This meaning that you will have to pay taxes on that 4000 just as if you had received it from your employer.

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The portion of the debt that is forgiven will be reported to the IRS the same as if they were to hand you the cash to pay off the debt. You would likely receive a 1099 for this forgiven part that says "Cancellation of Debt" that you would owe taxes for. But you can protest this with the IRS separately if your assets do not exceed your debts at the time the debt was settled, when the creditor issues the 1099. You only owe taxes on the amount to "the extent of insolvency".

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