I have a 16,000 dollar line of credit charge off with bank of america. They offered me a deal to settle for 2600.00. I tried to get them to do a pay to delete but they would not. Should i take the deal to settle and what all do I need to get in writing before I say yes?
Settlement There are a lot of questions to answer first: 1. Is the debt within Statute of Limitations (is it enforceable)? 2. Why do you want to settle? to improve credit? to stop collection efforts? 3. Is the amount you owe 16K and they offered 2600? Did this come from negotiation or just an out of the blue offer from BofA?
There are a lot of questions to answer first: 1. Is the debt within Statute of Limitations (is it enforceable)? 2. Why do you want to settle? to improve credit? to stop collection efforts? 3. Is the amount you owe 16K and they offered 2600? Did this come from negotiation or just an out of the blue offer from BofA? 1. Yes 2. to stop collections 3. came from negotiations. They were the ones that came up with the settlement numbers
I would recommend that you take the deal; this sounds like a pretty good settlement offer. A few items to watch: 1) Get the agreement in writing before you pay. Make sure they detail how the account will be reported on your credit reports. (Most likely "Settled", or "Settled for less than owed". 2) You state this is a line of credit, is this tied to your home, as in a HELOC? Make sure this account is not labeled as a forclosure item. 3) Be aware that you may receive a "1099" tax reporting form for the balance ($16,000 - $2,600 = $13,400) as "income". Be prepared to pay income tax on this forgiven amount, which could now be classified as "income" to you.
Couldn't the remaining balance be bought or assigned to a CA? If so, what can be done? Can't it be stated in the agreement what exactly can be done with the "forgiven" amount?
If the debt is "settled", then the balance cannot be sold off for further collection. The business is writing off the balance as a bad business expense. The agreement should state that the debt issue is closed, and has been mutually satisfied. This implies that the balance cannot be collected upon, as it is being removed.
