Chase...any recent lawsuits?

[pulpfiction0]

Anyone know if Chase is still suing? 

 

Obviously they used to be one of the most litigious creditor, but since getting smacked down for their collection practices a few years ago, my understanding was they ceased legal collections.

Tried to search on my state court's websites, but there are literally 10,000+ Chase cases circa 2010-3015 to wade through.  Unfortunately there's no way to sort by the newest dates.

I have a few Chase chargeoffs from over two years ago.  They've sent settlement offers for about ten cents on the dollar...which was unheard of from Chase years ago.

[admin]

https://consumerrecoverynetwork.com/question/chase-huntington-bank-charge-off-small-balance-credit-card-lawsuit/

[BackFromTheDebt]

On 12/2/2020 at 6:04 PM, pulpfiction0 said:

Anyone know if Chase is still suing? 

 

Obviously they used to be one of the most litigious creditor, but since getting smacked down for their collection practices a few years ago, my understanding was they ceased legal collections.

Tried to search on my state court's websites, but there are literally 10,000+ Chase cases circa 2010-3015 to wade through.  Unfortunately there's no way to sort by the newest dates.

I have a few Chase chargeoffs from over two years ago.  They've sent settlement offers for about ten cents on the dollar...which was unheard of from Chase years ago.

This is an exercise in risk assessment. 
 

First, from the Chase POV.  If they sell the debt to a JDB, they will probably get pennies on the dollar.  This is almost a sure thing. They know they can get something, the question is how much.  Or, they can get the sure 10 cents on the dollar by settlement with you.  They come out a few dollars or tens of dollars better with the settlement.  
 

Now, from your POV.  
 

If you settle with Chase, the debt is paid off for 10%.  it will be marked as paid for less than the full amount on your credit reports, which is better than being a live debt.  If you want to borrow money for a house or car anytime in the future, you don’t have that hanging over your head.  
 

If you don’t settle, A mortgage broker would probably make you pay the debt in full before giving you a loan. Maybe a JDB will sue you. Maybe you can make them go away with arbitration, but that may cost $250 plus the time it takes for a court appearance and writing the MTC and filing the case in arbitration. Or maybe you will get a bad judge who will throw out your MTC and make you pay the entire amount plus court costs plus interest, etc.  

 

I gave advice to someone a few months ago which I will give to you:  if you can afford the 10%, pay it and get this out of the way forever.  If you can’t, then hope they don’t sue and hope you can win with arbitration.  
 

My personal situation was with an old WaMu account that converted to Chase when the records were really bad.  So I DV’d them to death when they didn’t have the records. That was over a decade ago.  These days they will have the records.  

[Impress]

@pulpfiction0  I have to agree with @BackFromTheDebt.  I took the offer earlier this year from Chase, settling my debt from a couple of years ago for 10%.   I'm also dealing with lawsuits for other cards that were defaulted around the same time.  Dealing with the lawsuits sucks.  Take the deal.

[TC14]

Hello! I know this is an older thread, so I hope bumping it with what is (for me) a relevant question is allowed. I'll be brief.

@BackFromTheDebt @ImpressTHANK YOU for your post re: Chase and the 10%. I am currently in an identical situation being offered 10c on the dollar for approx $12k over 2 cards with Chase. Here's my question (I've spoken to Chase about it, my tax person, and attempted to contact the IRS).

Taking the 10% deal I'm told will definitely trigger a 1099 to be issued next year to me for the remaining forgiven amount. Even though I'm (unfortunately) currently unemployed with an uncertain future, I may owe some tax rate on the remaining ~10k. Even at say 15% that's a huge chunk of change. I've considered allowing the debt to go to Portfolio and negotiate with them as I had a similar situation with Citi a few years ago, waited, and later settled with Portfolio and did not receive a 1099 for a ~$6k of forgiven debt.

I'm confused what the right move is here. Settle now with Chase and take the 1099, or roll the dice and allow the debt to be bought up and try to negotiate there hoping for NO 1099.

Any thoughts? I greatly appreciate this forum. It's been a huge help.

T

[Clydesmom]

20 minutes ago, TC14 said:

Hello! I know this is an older thread, so I hope bumping it with what is (for me) a relevant question is allowed. I'll be brief.

@BackFromTheDebt @ImpressTHANK YOU for your post re: Chase and the 10%. I am currently in an identical situation being offered 10c on the dollar for approx $12k over 2 cards with Chase. Here's my question (I've spoken to Chase about it, my tax person, and attempted to contact the IRS).

Taking the 10% deal I'm told will definitely trigger a 1099 to be issued next year to me for the remaining forgiven amount. Even though I'm (unfortunately) currently unemployed with an uncertain future, I may owe some tax rate on the remaining ~10k. Even at say 15% that's a huge chunk of change. I've considered allowing the debt to go to Portfolio and negotiate with them as I had a similar situation with Citi a few years ago, settled, and did not receive a 1099 for a ~$6k of forgiven debt.

I'm confused what the right move is here. Settle now with Chase and take the 1099, or roll the dice and allow the debt to be bought up and try to negotiate there hoping for NO 1099.

Any thoughts? I greatly appreciate this forum. It's been a huge help.

T

Take the deal.  If you are unemployed and broke there is a form you can file with your taxes return and the 1099 indicating insolvency.  

[TC14]

29 minutes ago, Clydesmom said:

Take the deal.  If you are unemployed and broke there is a form you can file with your taxes return and the 1099 indicating insolvency.  

That was my first thought. Seems pretty clear cut. Thank you. Just want to get some opinions from any others that have been through it as well.

[TC14]

Any others been through this and have insight?

[Bulldoger]

6 hours ago, TC14 said:

That was my first thought. Seems pretty clear cut. Thank you. Just want to get some opinions from any others that have been through it as well.

Wish I known they went down that far, I settled for 36%, take the 10% even if you have to put it on another credit card, finance company loan,  borrow from relative. sell blood. They might even let you make it in payment if you ask.  You don't want to risk debt being sold. 

 

[BackFromTheDebt]

3 hours ago, TC14 said:

Any others been through this and have insight?

I have been down the 1099 route, if that’s what you mean. 
 

When I had my 1099s, I was insolvent.  I was heavily in debt.  Due to the mortgage crisis, my house was under water, so to speak.  
 

Also, for the earlier debts, I was insolvent due to my other debts.  That made it easier. 
 

Every year I had 1099s, the IRS sent me a letter saying I still owed taxes.  Every year I wrote out a sheet showing my assets and liabilities, with my liabilities greater than my assets.  Every time they accepted it.  
 

The last time I was solvent except for some debts to family members.  Those debts made me insolvent.  It was fine with the IRS.  They didn’t check with my mother or my mother-in-law to see if the debts were legit.  They also accepted my estimate of the worth of my home and my cars, etc.  

 

Lets say you are forgiven $10k. Before the debt is forgiven you are under water by $11k or more.  You owe nothing to the IRS 

 

If you are underwater by $5k, then the first $5k makes you even. You pay taxes on the other $5k.  If you are in the black, you pay taxes on the entire $5k. 
 

So at the time you are forgiven make a list of all your assets and liabilities.  If you get paid next Friday and have a balance on your credit card, the balance is a liability, and you don’t have the asset yet.  
 

Don’t cheat yourself on your accounting. Don’t lie either.  Lying on your accounting to evade taxes is a crime.  They usually don’t catch you, but a former President is rumored to be close to indictment over tax evasion due to alleged illegal accounting.  Decades ago another former President was pardoned by his successor and thus avoided indictment for tax evasion.  

[TC14]

 

@BackFromTheDebt

Gotcha. Thanks. My debt at this point is far greater than the amount about to be forgiven on this one settlement. So as I understand it now, as long as the forgiven amount does not take me into the black, I do not owe taxes on it. Which is what I'd hoped for. Let me ask you one more thing.. as I continue to do this and chip down my debts, does all cumulative forgiven debt continue to be tallied by the IRS year after year? Meaning that once I finally do become solvent and get out of this, will they hit me with the entire amount of forgiven debt on all the accounts I plan to attempt to do this for?

Example: So far across two years, I've settled ~$20k on 3 credit cards for about $3k. I have about $30k more to go (ugh). Once I get rid of the rest (assuming through settlement like this) will I one day then get hit with a tax liability for the original settled $17k and whatever I settle the rest for?

[BackFromTheDebt]

Your liability is for a particular debt at the time it is forgiven.  
 

When you have forgiveness put you in the black, then you are liable for only the portion that puts you over the line. 

[nobk4me]

On 6/7/2021 at 11:02 AM, Clydesmom said:

Take the deal.  If you are unemployed and broke there is a form you can file with your taxes return and the 1099 indicating insolvency.  

Not necessarily.  IRS Form 982 is what you have to file with your 1040 return.  It does not deal with income, but assets and liabilities.  Being unemployed is not what makes you insolvent.  Being insolvent means you owe more debt than what your assets are worth.  

If you own a house and car, and your debts do not exceed their values, you are not insolvent.

[TC14]

8 hours ago, BackFromTheDebt said:

Your liability is for a particular debt at the time it is forgiven.  
 

When you have forgiveness put you in the black, then you are liable for only the portion that puts you over the line. 

Thanks. Then the answer to my original question is, yes. Take the 10% deal.

Appreciate the input, all. It helped.

[TC14]

1 hour ago, nobk4me said:

Not necessarily.  IRS Form 982 is what you have to file with your 1040 return.  It does not deal with income, but assets and liabilities.  Being unemployed is not what makes you insolvent.  Being insolvent means you owe more debt than what your assets are worth.  

If you own a house and car, and your debts do not exceed their values, you are not insolvent.

Thanks for your feedback. Fortunately (or unfortunately depending on how you look at it) my debt outweighs my assets.

Nothing about being in this situation is fun, but at least there's some people out there willing to help out.

[Bulldoger]

3 hours ago, TC14 said:

Thanks for your feedback. Fortunately (or unfortunately depending on how you look at it) my debt outweighs my assets.

Nothing about being in this situation is fun, but at least there's some people out there willing to help out.

Just one thing has not been mention but probably not an issue. IRS considers your 401K or other retirement fund as an asset even if you do not have access to it. I can only take out one loan which I have done and i am paying back to my 401K. I have 100s of thousands in retirement I cannot touch until 6 months after I payback my current loan. looking at my other assets which are about 2K I would be insolvent but because I save for retirement I am not.   

[TC14]

7 hours ago, Bulldoger said:

Just one thing has not been mention but probably not an issue. IRS considers your 401K or other retirement fund as an asset even if you do not have access to it. I can only take out one loan which I have done and i am paying back to my 401K. I have 100s of thousands in retirement I cannot touch until 6 months after I payback my current loan. looking at my other assets which are about 2K I would be insolvent but because I save for retirement I am not.   

Understood. In my case, my 401k was liquidated a long long time ago when this all started years ago. My only "asset" per se is a 13 year old vehicle I refuse to upgrade and I doubt anyone's coming for that. The idea is to stay quiet and low key and dig out of the hole little by little. Eventually, debt disappears whether by settlement or statute of limitations, credit begins to improve, and at some point get back to my life and career without the stigma and baggage of debt and poor credit hindering my moves and plan.

Ironically, I actually had to do this once before around 2001, and was successful. Had a prosperous 15 or so years before life events transpired that created it again. It happens. Just put the head down the drive through it.

Thanks guys/gals.

[TC14]

Just to close this out, I took the deal and settled the accounts. Chase tells me they will report the accounts as "settled paid in full." Whatever that means. I'm not sure if I'll take a credit hit as my tax gal said I would, or if settling this live debt will improve my score. I'll be interested to see that part. I may report back here in a month or so when I pull my credit again and check.

The 1099-c thing seems to be pretty straightforward, but you never really know until the time comes with these things. But that's a year out. If I remember to I may come back and update that part as well.

Thanks to all that chimed in. It really was immensely helpful and I appreciate it.

 

[BackFromTheDebt]

I don’t know why you would take a credit hit.  
 

Having a settled account is not as good as a deleted account.  And it is slightly worse than a paid in full formerly delinquent account. 
 

The thing is, you have this monkey off your back.  In time all the bad stuff will fall off your credit reports.  
 

In addition, if you need a big loan such as a mortgage, having the account settled is 1000 times better than having it delinquent with you owing a lot of money. 

[TC14]

2 hours ago, BackFromTheDebt said:

I don’t know why you would take a credit hit.  
 

Having a settled account is not as good as a deleted account.  And it is slightly worse than a paid in full formerly delinquent account. 
 

The thing is, you have this monkey off your back.  In time all the bad stuff will fall off your credit reports.  
 

In addition, if you need a big loan such as a mortgage, having the account settled is 1000 times better than having it delinquent with you owing a lot of money. 

Indeed. One less thing to worry about ? 

As to the credit score hit... that's just what my local tax accountant said when I ran all this by her. But frankly I don't have much faith in her knowledge on this matter. This forum seems far more credible.

[WhoCares1000]

50 minutes ago, TC14 said:

Indeed. One less thing to worry about ? 

As to the credit score hit... that's just what my local tax accountant said when I ran all this by her. But frankly I don't have much faith in her knowledge on this matter. This forum seems far more credible.

It used to be that when you settled or paid on a bad account, your score would drop because the account would receive an update. It was a bug in the FICO algorithm and the JDBs discussed this issue with FICO (because people were refusing to settle due to this) and got them to change the algorithm so that a settled account would look better than a open bad account.

[TC14]

14 minutes ago, WhoCares1000 said:

It used to be that when you settled or paid on a bad account, your score would drop because the account would receive an update. It was a bug in the FICO algorithm and the JDBs discussed this issue with FICO (because people were refusing to settle due to this) and got them to change the algorithm so that a settled account would look better than a open bad account.

Huh, that's interesting. It seems intuitive that would be the case. Not to mention as @BackFromTheDebt said just getting it off my plate and moving on to the next hill to climb is a mental victory.

[Bulldoger]

Posting here since this is where I found out about the 10% offers. Should I default on my Chase payment plan of  36% which would end in Jan 2023. Then wait for a 10% offer and get this account settled sooner cheaper? 

[Clydesmom]

6 minutes ago, Bulldoger said:

Should I default on my Chase payment plan of  36% which would end in Jan 2023. Then wait for a 10% offer and get this account settled sooner cheaper? 

NO.  Chances are high you signed a consent judgment to get that 36% offer.  That also includes a statement that if you default again they do not have to sue you they can simply file that judgment with the courts and garnish your wages.  Settling is about leverage.  You are assuming they would have offered you the same they offered the OP in this post and that isn't true.  The collection laws in VA and FL are very different which may have prompted CHASE to offer the OP something better.  Another issue is you are making payments.  10% offers come with lump sum single payment settlements NOT payments over time.  CHASE took a risk on you offering you a payment agreement a second time after the primary default.  Defaulting again will NOT go well for you.

[TC14]

29 minutes ago, Bulldoger said:

Posting here since this is where I found out about the 10% offers. Should I default on my Chase payment plan of  36% which would end in Jan 2023. Then wait for a 10% offer and get this account settled sooner cheaper? 

The only thing I have to add is that it took nearly 4 or 5 years of me ignoring Chase while they offered less and less settlement amounts. It's not easy ignoring all those calls. In my case it was a war of attrition. When I received the 10% it felt to me like a final offer. So I responded by doing some research and ended up here. It wasn't until I found this forum that I realized 10% offers are a calculation on their part and their process. I'm glad I did. My initial plan was to allow the $11k to default and go to collections and deal with them, as I had done so once before with Citi/Portfolio and was able to settle $8k for $1500 after having been served papers for court. Citi never offered me a settlement deal before selling my debt off. I called Portfolio Recovery and negotiated the settlement.

One thing I do know, however, is that if I had entered into an payment arrangement of any kind, and defaulted on it, it would have made the situation much worse for me. I was very careful on that.

Edited June 9, 2021 by TC14
clarity