Comments on: if you stop paying your credit card bill, will the bank negotiate a lower pay-off amount with you? http://www.reducecreditcardbills.com/credit-cards/if-you-stop-paying-your-credit-card-bill-will-the-bank-negotiate-a-lower-pay-off-amount-with-you/ Eliminate Your Debt From Credit Cards Fri, 18 May 2012 07:22:01 +0000 http://wordpress.org/?v=2.7.1 hourly 1 By: bdancer222 http://www.reducecreditcardbills.com/credit-cards/if-you-stop-paying-your-credit-card-bill-will-the-bank-negotiate-a-lower-pay-off-amount-with-you/comment-page-1/#comment-1127 bdancer222 Thu, 07 Jan 2010 23:38:01 +0000 http://www.reducecreditcardbills.com/credit-cards/if-you-stop-paying-your-credit-card-bill-will-the-bank-negotiate-a-lower-pay-off-amount-with-you/#comment-1127 The actual credit card company is not likely to accept less than full balance unless you have some permanent change of status, like medical disability. But even if you do, negotiate settlement, the account will be report to the credit bureau as charge off/settled -- a negative. You will also be sent a 1099 for the forgiven portion (anything more than $600) which will have to be included on your income tax return. Now if the account gets sold off to a collection agency, you will have a much better chance of settling for less than full balance. As far as what's better for your credit, it's all bad. Late payments and charge offs stay on your credit report for 7-1/2 years from the date of first deficiency, whether paid, settled, or unpaid. Have you considered credit counseling? Check here for a NFCC member: . These are legit, non-profit companies that offer debt management plans for a nominal fee. They negotiate lower interest rates and payments so you can pay off your debt. While in the program, it is noted on your credit. However, upon completion, that notation is removed and you will have decent credit. You will probably be required to seek credit counseling before filing chapter 7 bankrutpcy anyway. The actual credit card company is not likely to accept less than full balance unless you have some permanent change of status, like medical disability. But even if you do, negotiate settlement, the account will be report to the credit bureau as charge off/settled — a negative. You will also be sent a 1099 for the forgiven portion (anything more than $600) which will have to be included on your income tax return.

Now if the account gets sold off to a collection agency, you will have a much better chance of settling for less than full balance.

As far as what’s better for your credit, it’s all bad. Late payments and charge offs stay on your credit report for 7-1/2 years from the date of first deficiency, whether paid, settled, or unpaid.

Have you considered credit counseling? Check here for a NFCC member: . These are legit, non-profit companies that offer debt management plans for a nominal fee. They negotiate lower interest rates and payments so you can pay off your debt.

While in the program, it is noted on your credit. However, upon completion, that notation is removed and you will have decent credit.

You will probably be required to seek credit counseling before filing chapter 7 bankrutpcy anyway.

]]> By: twoXofXhearts http://www.reducecreditcardbills.com/credit-cards/if-you-stop-paying-your-credit-card-bill-will-the-bank-negotiate-a-lower-pay-off-amount-with-you/comment-page-1/#comment-1126 twoXofXhearts Tue, 05 Jan 2010 22:06:50 +0000 http://www.reducecreditcardbills.com/credit-cards/if-you-stop-paying-your-credit-card-bill-will-the-bank-negotiate-a-lower-pay-off-amount-with-you/#comment-1126 It depends on the company and if you are in collections. Normally, yes. But often, no. It can hurt your credit score but I had the same issue with HSBC I took a lower payment and took out a 200$ card to rebuild my credit. Making only 20$ purchases a week, I paid 40 a month plus the interest and stabilized my credit in a little over a year It depends on the company and if you are in collections. Normally, yes. But often, no. It can hurt your credit score but I had the same issue with HSBC I took a lower payment and took out a 200$ card to rebuild my credit. Making only 20$ purchases a week, I paid 40 a month plus the interest and stabilized my credit in a little over a year

]]> By: Steph http://www.reducecreditcardbills.com/credit-cards/if-you-stop-paying-your-credit-card-bill-will-the-bank-negotiate-a-lower-pay-off-amount-with-you/comment-page-1/#comment-1125 Steph Sat, 02 Jan 2010 16:59:34 +0000 http://www.reducecreditcardbills.com/credit-cards/if-you-stop-paying-your-credit-card-bill-will-the-bank-negotiate-a-lower-pay-off-amount-with-you/#comment-1125 When companies do that, they have to "write off" what you didn't pay as a loss. They turn all that information into the IRS. If it is more than a certain amount (I think 5000, but I'm not sure), then you have to report that as income on your taxes. If you don't, you can be audited and end up owing the government a lot of money. Anytime a debt is negotiated down, it's on your credit report for 7 years. When companies do that, they have to “write off” what you didn’t pay as a loss. They turn all that information into the IRS. If it is more than a certain amount (I think 5000, but I’m not sure), then you have to report that as income on your taxes. If you don’t, you can be audited and end up owing the government a lot of money.

Anytime a debt is negotiated down, it’s on your credit report for 7 years.

]]> By: jlf http://www.reducecreditcardbills.com/credit-cards/if-you-stop-paying-your-credit-card-bill-will-the-bank-negotiate-a-lower-pay-off-amount-with-you/comment-page-1/#comment-1124 jlf Wed, 30 Dec 2009 10:36:10 +0000 http://www.reducecreditcardbills.com/credit-cards/if-you-stop-paying-your-credit-card-bill-will-the-bank-negotiate-a-lower-pay-off-amount-with-you/#comment-1124 Don't count on it. And it will severely damage your credit record. Don’t count on it. And it will severely damage your credit record.

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