MSI Collections? (Bank of America)

[Flatbroke1]

Had a call today from MSI collections 4XX-XXX-XXXX XXXXXX....After speaking to Angela I faxed a settlement offer......anyone have any experience with this company? Anything to watch out far? Any suggestions?

Please do not put in proper names or phone numbers for legal reasons. Thank you.

[Flatbroke1]

I was researching the tax consequences and having second thoughts about settling. I am thinking of just sitting tight and seeing what they do? I am a Texas resident. I suppose the very worse is just phone calls and then finally suing me. I have 2 Discover cards that were charged off in February and have not received any phone calls or mail from them at all. What do you think?

[optimistic1]

Dont fret the 1099, if you can prove you are insolvent to the IRS, you wont pay any extra taxes. People always forget to tell people about that part, instead, the try to scare you. And with proper documentation, the amount they would try to sell off to a different collection agency would be uncollectable, especially if they sue you, and you show up in court with your settlement paperwork from the original.

If you live in Texas, they could sue, but they cant collect from your wages, your state has garnishment laws that protect this. They could collect in other ways though, but not from your wages.

I would much rather have "settled" on my credit report, than have a active charge off, or have a BK reported for 10 years.

Why are you choosing to settle rather than file a bk?

[Flatbroke1]

Thanks Optimistic1, I am insolvent and have a professional do my taxes each year. Supposing I kept copies very careful documentation forever, i.e. my offer, their acceptance, copy of payment, declaration of the 1099-C on my taxes, etc, etc. Do you think the documentation would be sufficient if the deficiency is sold or passed on to other collection agencies? I guess that would be my main concern. If I was successful in settling with BOA, which is my highest debt, I wonder if that would be something to show Discover to try to settle with them, since they are a lower debt? Or would that even matter? Thanks for your thoughts!

[optimistic1]

If you have a pro doing your taxes, and you can prove to the irs you are insolvent, then the 1099 will be void.

You know, the whole notion that the creditors are trying to sell off the forgiven debt to another collection agency is something I personally have not read, except on this forum. If they send you a letter saying the debt is considered settled upon payment, then they just slit their own throat, its settled.

You can always utilize a law firm to handle the debt settlement process, upon which, everything is documented professionally. I think a creditor or collection agency would be much less inclined to try and sell off the forgiven amount, if they are actively working with a debtors law firm, rather than the consumer handling it on their own, unaware of pitfalls.

With that being said, if you can provide the court, documents that show the debt is considered settled upon your payment to them. Then I dont see how they have a case. Of course, you would have to go through the trouble of filing an answer with the court and showing up for hearings, etc.

If anyone can provide us with some links about creditors doing this, it would be great to see.

[Flatbroke1]

Thanks for your thoughts, actually in all honesty, I also have only read about debts being resold on this forum. I had read once or twice of it happening somewhere else, but those "resold" settled debts were isolated instances of the settled debt just not being purged from the creditors systems in error. One instance was wherein someone had a problem was because they did not keep a paper trail and copy of canceled check as proof. A professional consumer credit counseling service simply told me that a paper trail and proper documentation was all that was needed in the event the debt would ever resurface again. Which if I were to settle, copies would be kept in a safe deposit box at a bank with extra copies at home....I would keep these copies forever!

[optimistic1]

No doubt, well good luck to you whichever route you choose.