BOA Good; Chase & AMEX Bad

[Millenia]

I have been watching this forum for the past several months but only joined today. Wanted to give everyone the benefit of my settlement attempts. We stopped paying most of our cards about four months ago.

BOA $47,000 They agreed to 20%, about $9,500 over four equal installments. Thius was a month ago and I thought the others would give similar deals.

Chase - four accounts totaling $29,000. One of them has been turned over to a law office. They were ready to start the lawsuit on one account next week. They want 65%, about $19,000 in a lump sum.

AMEX $22,500. They want 55% or about $12,375.

Capitol One $5,000 They want $3,000.

Told Chase and AMEX they would probably get very little. They don't care. Why would they when they just $700 Billion Dollars.

Also owe small ones and my wife has some large ones in her own name.

Thought we could get a better deal. Will probably be filing within two months.

[chloe0724]

If you are planning to file, why are you negotiating paymets?

[Lajazz947]

If you are planning to file, why are you negotiating paymets?

I agree. They may be treated as preferential payments by a trustee.

Please check with your attorney before you negotiate anything.

[Millenia]

If we could settle we wouldn't file.

[Doghouse]

Problem with settling like that that kind of change is that you'll get 1099s from the bank for the amount forgiven which is considered income and taxed by IRS. I also have about 50K from BofA and stopped paying effective this month till I file in Jan or Feb. I nixed the idea of talking settlements with my CC's after my friend settled on 4 of her cards in the past and she got 1099s from all 4 for the amounts forgiven. Besides, I'd still have the issue of the house to deal with so might as well file.

[Millenia]

If you are insolvent you shouldn't owe any tax.

[treehugger1]

Yes, the insolvency clause for frorgiven debt is quite powerful. However, my understadning is that the IRS measure of insolvency also takes into account future value of pensions, etc. In my case, with $200K+ in retirement value, I would not meet the definition of "insolvency." Tread carefully in these waters. If you are truly insolvent, then you will not be responsible for forgiven debt under IRS requirements. Yet, the definition of insolvency might not be the same as the IRS'. Just my two cents.

[chloe0724]

And if you are truly inslovent, how would you be able to afford a settlement?

[Mary Irene]

Chase is the worst. They will hunt you down until they find you and get what they came for. Only way to get rid of them is to file. Then they sell the account.

[syn]

Actually, my dad's issues seem to be the opposite. Chase doesn't bother him really at all. It's Bank Of America. They went so far as to try to include me and my mom into his issue by asking either her or me to call the BOA account manager back when we have nothing to do with his delinquent accounts and have no name on the business.

So that means they shifted through my dad's BOA history and discovered that I also have a BOA card and my mom's 401k account is BOA.

My dad called the guy back alright and threatened legal action if he mentioned us again while calling. The guy denied ever mentioning us, guess he forgot the message he left on the machine!