HSBC has offered settlement

[DUMBAGAIN]

One of our HSBC cards has offered a pretty good settlement. They have offered to eliminate 58% of the debt and remove 700+ off our balance. They are willing to take it in 3 pmts of 180, I think its to good to pass up, Although they want the first payment by Dec 2nd!! That's an OUCH, but I think we need to work it out. Thoughts, does this sound like a good deal?

[Flamingo]

You have to do number crunching to see if it works for you and your financial state. It seems you owe a small amount of money (around $1400) and they are forgiving more than half of that debt. You will receive a 1099 for the $700 forgiven and will owe state and federal taxes on that amount (which will not be a large amount) in the tax year the amount is forgiven.

[StartingOver08]

Have you actually filed? If you have not filed then the proposal sounds like a good one.

BTW, it is my understanding that the 1099's only get issued for debt forgiveness on amounts greater than $600. This is a link to the IRS about it:

http://www.irs.gov/newsroom/article/0,,id=174034,00.html

Here is a layman's explanation of the 1099-C and a form to fill out if you received it in error or if you were insolvent at the time of debt cancelation:

http://www.lawhelp.org/documents/12041C11.pdf

The deal you have made sounds like a good deal if you are not going to file BK.

[DUMBAGAIN]

no we have not filed yet planning on doing after the holidays.

[StartingOver08]

If you are going to file BK, then why are you planning to make a deal with HSBC?

Don't be in a rush to pay anyone before you file. In fact, I would say just pay your necessary expenses and don't pay any unsecured debt. I orginally thought you were going to NOT file - just settle debt. But if you are filing - then you are throwing money away by paying HSBC before filing

[ready2puke]

Is this your only debt? If it isnt your still filing? Then why pay them if your still going to file?

[Tbornetun]

If you are filing, don't pay them a dime. Keep your money, it will not benefit you at all to make a deal now if you are intending to file within the next 60 days.

[slam22]

no we have not filed yet planning on doing after the holidays.

If you are planning on filing after the holdiays then I believe you are just wasting your money. I don't see how you are gaining anything by taking their offer if it will be discharged anyway in BK.

[DUMBAGAIN]

Let me explain, we are planning on filing, HOWEVER, we have to payback 100%. So for us this is a deal.

[AngelinaCatHub]

Let me explain, we are planning on filing, HOWEVER, we have to payback 100%. So for us this is a deal.

So, you are filing 13? Now I know a little about 7 but would this not be a preferential? If you HAVE to pay back 100% it is a good deal. Check with lawyer about preferential payments, but 100% is all of it anyway. Very small tax on that little amount. 'Hub

[DUMBAGAIN]

Ok here goes: We had a BK chapter 7 a few years, ago. So we have to pay back 100% as we are not eligible to receive discharge with the timeframe we are working with. We really do not want to file BK, we have no assests, no house etc. But we (I) did some really dumb things the past couple of years and now we are in a mess (again) thus my screen name I would rather try and make settlements with all creditors, however I know that can be risky. I don't want to be sued, I can't really risk a garnishment with my job, so that's really the only reasons we are thinking of filing the chapter 13. I've already consulted with a lawyer and I know we have to payback 100%.

I owe several creditors, but 3 of them are over $4000, those are the ones I'm most worried about.

I wonder if if I "prepare" for filing chapter13, and go ahead and try to make settlements, if I get sued then I could file, correct?

I just want to get everyone paid off and be done with this. Thanks for everyone's feedback.

[magyar123]

A Chapter 13 is a court ordered repayment plan of all debts, so why settle anything. Save your money for the court's calculated repayments.