You could potentially avoid counting the 1099C as income if you file the appropriate insolvency paperwork with the IRS at tax time - you can google it and it is really quite simple. You do not have to file bankruptcy to be considered insolvent by the IRS.
The others are right, once you ring that bankruptcy bell, it cannot be "unrung." As far as "threatening" bankruptcy, you could have your attorney forward a copy of a draft voluntary petition along with an offer of settlement. Also, if you are judgment proof, that should be stated in the letter as well. I have seen debt settled for literally pennies on the dollar. My favorite? $62,000 debt with an opening offer to settle of $3652. Settled for $2500. It can be done
However, usually bankrupcty is still your better bet. It allows you to keep ALL of your assets and push that reset button. It may be easier to clean your credit report after a bky than after doing debt negotiation, too. Depends on the creditor/collection agency.
Good Luck.
The others are right, once you ring that bankruptcy bell, it cannot be "unrung." As far as "threatening" bankruptcy, you could have your attorney forward a copy of a draft voluntary petition along with an offer of settlement. Also, if you are judgment proof, that should be stated in the letter as well. I have seen debt settled for literally pennies on the dollar. My favorite? $62,000 debt with an opening offer to settle of $3652. Settled for $2500. It can be done
However, usually bankrupcty is still your better bet. It allows you to keep ALL of your assets and push that reset button. It may be easier to clean your credit report after a bky than after doing debt negotiation, too. Depends on the creditor/collection agency.Good Luck.
It is always in your best interest to seek legal advice from a competent attorney licensed in your state. Any information I post here should not be construed as legal advice.
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