I owe over $10,000 οn a Bank οf America credit card. Thе bank hаѕ mаdе mе аn offer οf reducing thіѕ debt tο $2700. Thеу want mе tο pay аlmοѕt $700 fοr thе next four months аnd thеn thе debt wіll bе settled. I don’t hаνе аn extra $700 a month tο pay thіѕ οff аnd ехрlаіnеd thіѕ tο thе rept. If I саnnοt pay thе $700 a month thе account wіll gο tο thеіr legal department аnd I wіll hаνе tο pay thе full amount οf thе debt іn one year.
It seems lіkе a take іt οr leave іt situation. Whаt ѕhουld I dο?
First thing уου ѕhουld bе aware οf іѕ thаt even іf уου dіd "settle" fοr $2,700 under IRS regulations, аnу amounts above $600 thаt аrе charged οff bу a creditor mυѕt bе reported οn a 1099C аnd a copy sent tο thе debtor. Thе charged οff amount mυѕt bе reported аѕ income οn уουr income tax filing. (see source tο back thіѕ аnѕwеr)
Thеrе οnlу chance fοr full recovery іѕ through a court ordered wage garnishment (unless уου live іn North Carolina, Pennsylvania, South Carolina, Texas οr іn Florida іf head οf household) whеrе garnishment іѕ nοt permitted.)
Even іѕ thеу dіd obtain a writ οf garnishment, іt wουld still bе impossible tο pay іt οff іn one year аѕ thе amount garnished іѕ limited bу еіthеr уουr state οr federal guidelines.
Alѕο bе advised, B οf A dοеѕ nοt sell large debts tο collection agencies, thеу hаνе thеіr οwn іn-house collection department аnd fοr thаt amount owed, thеу wіll spend thе money tο seek legal action.
Yουr οnlу solution іѕ don’t lеt thеm pressure уου, inform thеm уου wουld need more time аnd thаt уου know thеу саn nοt mаkе уου pay thе whole amount within one year even іf thеу took уου tο court tο seek a judgment.
Hope thіѕ helps аnѕwеr уουr qυеѕtіοn.
That is about the best offer I have ever heard.
That is almost 1/4 of the original balance.
Not even books that I’ve read have ever mentioned they went this low.
If you can’t pay it without being late – their offer will be null and void.
It will either go to court or to collections.
Sorry to hear you are in such a bind – could you ask your parents for a loan?
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If it’s a credit card, it’s unsecured debt…and there’s no way they can MAKE you pay the full amount in one year. They can badger you and pester you to death, but more than likely they’ll just sell the debt to a collection agency…who will THEN badger you and pester you to death.
Before you do anything, go to http://www.nfcc.org and find a consumer credit counseling office close to you. (The REAL legitimate ones are non-profit, and will not require you to pay anything up front.) Talk to a counselor there, and see what they think about the offer. They might can help you get a better payment plan without it costing so much each month.
Good luck!
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1. Do not accept the offer if you will not be able to make the payments specified in the offer.
2. You will not "have to" pay the full amount in one year. You will be required to pay the full amount in one year. If you do not, then they will ruin your credit and send the debt to a collection agency, which will call you repeatedly and eventually sue you.
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This is a great offer….but as with most credit card card settlements, they want the settlement paid off fast rather than in small payments over several years. Make an offer for $3,500 as a settlement BUT with a monthly payment amount than you can afford…like $200/month.
- Get all terms of any settlement deal you reach with debt collectors IN WRITING BEFORE you give them your money. This letter should state the settlement amount and that the account will be settled/paid in full upon receipt of this amount from you. Never accept settlement deals over the phone that are not backed up in written terms. If you don’t, the debt collectors will deny that any settlement was ever made once they get your “settlement” money and will come back demanding more money from you.
- NEVER, EVER give out your checking account/bank routing numbers to debt collectors/creditors for making electronic debit payments. If you do they’ll take out way more than you think and this will create an avalanche of bounced checks. Pay only via USPS money order. Photocopy and keep in your permanent records along with the settlement letter.
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how did you get bank of america to reduce the debt? because i have the same problem??
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Take It.
That’s a great offer.
Do you have something you can sell? Sell the car….the computer…the furniture. A kitchen table is nice….but if you can sell if …that’s $200 toward the 2700 you need. Sell the tv and any video game system you own. Have a yard sale. Donate blood. If you are crafty….get a table at the local flea market and sell your crafts. Look around the house….sell anything that’s not nailed down.
Make sure you get the agreement in writing.
Also make sure you do not give them electronic access to your accounts. Let them know you will send a cashiers check or money order to them.
Post fliers in your neighborhood offering to rake leaves. If you are handy, post filers to be a "rent a hubby"….man for hire to do chores and honey-do items around the house. Advertise in your church news letter.
Work your fanny off…..sell anything you can get your hands on and scrap up the $2700 to pay this off in full.
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First thing you should be aware of is that even if you did "settle" for $2,700 under IRS regulations, any amounts above $600 that are charged off by a creditor must be reported on a 1099C and a copy sent to the debtor. The charged off amount must be reported as income on your income tax filing. (see source to back this answer)
There only chance for full recovery is through a court ordered wage garnishment (unless you live in North Carolina, Pennsylvania, South Carolina, Texas or in Florida if head of household) where garnishment is not permitted.)
Even is they did obtain a writ of garnishment, it would still be impossible to pay it off in one year as the amount garnished is limited by either your state or federal guidelines.
Also be advised, B of A does not sell large debts to collection agencies, they have their own in-house collection department and for that amount owed, they will spend the money to seek legal action.
Your only solution is don’t let them pressure you, inform them you would need more time and that you know they can not make you pay the whole amount within one year even if they took you to court to seek a judgment.
Hope this helps answer your question.
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http://www.nolo.com/legal-encyclopedia/article-29792.html
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Dude call 1-800-213-9968 and ask for junior ext 112 i owed 30k in credit cards and ended up payng 11,589 in 24 months…
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