Verbally rejected after writting a physical letter

So, I was by phone today-verbally rejected after writting a physical letter and mailing it to the collections agency offering to start a payment plan making out a check today and sending it out. I went on the freefax site and copied it to the original medical compay/Doctor’s billing dept. that hired them and said my money was being refused. I wonder what this will do? I just want the darn agency to accept the payment plan. Can we turn them on eachother and get what we want? Maybe I will in this case.

I usually offer the CA (collection agency) 10% of the balance they claim and demand a letter stating that they will report the account paid in full to the credit bureaus. Sometimes they will accept and other times they want more like 40% of the balance. That starts a negotiating cycle where we usually settle on 20-25% of the balance. I took on a 2nd job just to pay off all my accounts.

What about the IRS rules on settling debt? Don’t you have to claim the difference as income? I would like to settle my debt and straighten out my credit. I became ill recently and by the time I was able to receive disability, I was slammed with medical bills. My credit was hurt during the disability process. I was fired while on FMLA. Even though that is illegal, my lawyer said we couldn’t do anything about it because technically I was employed by an employment agency and not the company that fired me. Nonetheless, under the rules, even though I qualified for unemployment I could not collect while I was waiting for a disability determination, which took 18 months (and I’m one of the lucky ones!).

Having to go without any income for 18 – 24 months or more is designed to ruin one’s credit. Add on tens of thousand in medical bills in the interim and say goodbye to any savings and so on, you get the idea. I was just getting my credit straightened out too. I’ve been sending cease and desit letters to keep my phone from being a nightmare and paying what I can. More recently I’ve been worrying how I am going to pay rent with 500+ for medicare costs per month, not including prescriptions. And the medical bills aren’t over. I still need a kidney transplant. So I need the medical coverage. After waiting 25 months for medicare, I find out it will cost more than private insurance did. So I’ve wanted to straighten out my credit, but even if I can get a creditor to accept 10%, is the IRS going to charge me for the other 90%, and how much?

Looks like I’ll have to declare the amount written off as income and the banks/creditors can declare the amount written off as a bad debt expense. I love our congressman when they pass laws that put us (the consumer) at a disadvantage. I don’t see the point of trying to straighten out my credit. It’s double dipping. The company gets to write off the loss and someone, the IRS and the company now both still collect on the debt. Until consumers get some kind of relief, I’m taking care of myself.

I believe the correct answer is, you need to be prepared to pay the taxes.  You are not required to declare it unless the financial institution submits a 1099.  I would not suggest asking them if they are submitting one, but wait and see.

If you file bankruptcy and you are married

Does any one know if you file bankruptcy and you are married do you both have to file? I am in forclosure right now and have a sale date the bank i have been trying to get the bank to modify my loan and have asked them to postpone the sale date. I was told they would not do it untill 10 days before the date. that does not give me much time to do anything.

You both do not have to file. However if one of you don’t file, the creditors of your joint debts will go after the one who didn’t file in order for them to get paid. It is usually cheaper to file a joint bankruptcy than to file 2 separate individual bankruptcies; so you should consider it. However, you should discuss this with an attorney as they may be able to offer advice to help your particular situation. But it would be best if you both file because if not they se going to your spouse pay your debt.

My co worker has two pay day loans she is struggling with. She has offered to pay them 100 dollars monthly and they are refusing to work with her. They told her she would have to do arbitration to request a different payment arrangment. I feel really awful for her, her husband abandoned her with 2 kids, no education and she’s living on just above minimum wage. I know the pay day loan was a bad choice, but I know she felt she had no where else to turn. She doesn’t want to default, but needs a workable payment arrangment. Does anyone know what this arbitration process is, and will it help her? What about consolidating the loands, they are with the same place?

I am new to this blog. Arbitration is a much more workable solution than going to court, however in this case, the Arbitration officials or organization is selected by the lending company. I would suggest that your friend pay $100.00 on her account until it is paid off. Send the payments by mail, certified, return receipt, along with a letter explaining her situation and proposing the new repayment plan. Hope this helps.

The deck is stacked against anyone who is foolish enough to pay off their debts. File bankruptcy and your credit score will return faster with less cost and hassle than if you negotiate a deal. Sad but true. I would never call say that paying off one’s debts is foolish, it is the right thing to do if one can.  There are occasions where a lender forces a person into bankruptcy court because the lender (or collection agency) won’t work with the individual.  I have settled several debts through negotiation and have paid off all my debts over the past 4 years and watched my credit score climb rather quickly.  HOWEVER, I do not intend to use the credit score to ever borrow money again except maybe on another house once I sell my current one.  But only when I know I have 6 months expenses in savings and have at least an additional 20% down. One would be very wise to read Dave Ramsey’s books about money and put them into practice.