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    #1

    20% Cap1 offer

    Most recent collection notice from Cap1 (Law Office of Mitchell N Kay):
    Balance of 8.5k
    Offer of 6 monthly payments at $275,
    (or) "settlement offer" of 6k.
    They apparently either don't do math well, or aren't very bright. If I had 6k, why wouldn't I pay 275x6 (=$1650)?

    Gee, I'd better write out that 6k check first thing in the morning...
    1/15/10 Filed ch7 2/18/10 314 meeting
    2/22/10 Report of No Distribution
    4/20/10 Discharged 5/20/10 Closed!
    Tags: None
    #2
    Originally posted by pcn View Post
    Most recent collection notice from Cap1 (Law Office of Mitchell N Kay):
    Balance of 8.5k
    Offer of 6 monthly payments at $275,
    (or) "settlement offer" of 6k.
    They apparently either don't do math well, or aren't very bright. If I had 6k, why wouldn't I pay 275x6 (=$1650)?

    Gee, I'd better write out that 6k check first thing in the morning...
    Perhaps they mean 6 monthly payments of $275 and they will consider the account current. Or $6k and they will consider it paid (settled)?
    Just a thought.
    Filed CH13 - 06/2009
    Confirmed - 01/2010

    Comment

      #3
      Could be. I wouldn't trust them either way at this point.
      1/15/10 Filed ch7 2/18/10 314 meeting
      2/22/10 Report of No Distribution
      4/20/10 Discharged 5/20/10 Closed!

      Comment

        #4
        mitchell n. kay, yeah he has one of my Crap 1 accounts. i sent him a DV and havent heard a peep.
        Stopped Paying CC's 2/2009. Retained Attorney 1/10/2010 Filed 1/23/2010. Discharged 5/19/10 $187K CC, $240K 2nd,$417K 1st, No asset Ch-7

        Comment

          #5
          They move slow.

          They were one of 2 collectors who actually sued us. Total of 3 judgments from the 2 collectors.

          However, it took nearly three years for the M. Kay people to get serious. We were scheduled for a debtor exam the 2nd week of December, and filed Ch 7 a week prior.

          They DID get ugly, but not until nearly three years after the last payment.

          Most people can handle a 3 year wait.

          Toothless tigers, really, and not a serious threat unless you are trying not to file at all.
          11-20-09-- Filed Chapter 7
          12-23-09-- 341 Meeting-Early Christmas Gift?
          3-9-10--Discharged

          Comment

            #6
            Originally posted by DeadManCrawling View Post
            They move slow.

            They were one of 2 collectors who actually sued us. Total of 3 judgments from the 2 collectors.

            However, it took nearly three years for the M. Kay people to get serious. We were scheduled for a debtor exam the 2nd week of December, and filed Ch 7 a week prior.

            They DID get ugly, but not until nearly three years after the last payment.

            Most people can handle a 3 year wait.

            Toothless tigers, really, and not a serious threat unless you are trying not to file at all.
            i figured as much, besides, i'm in Ca., and he's in NY. i have 2 other Ca law firms with several of my accounts who file like crazy in my local court, just keep waiting to see my name on the docket. good thing i will be filed by the end of the month.
            Stopped Paying CC's 2/2009. Retained Attorney 1/10/2010 Filed 1/23/2010. Discharged 5/19/10 $187K CC, $240K 2nd,$417K 1st, No asset Ch-7

            Comment

              #7
              C1 seems to have a lot of patience, in general. I have heard that they do keep pretty good records. They were involved in a large suit in the past related to some kind of strange (illegal) collection practices. I don't remember the details. I'm 2 1/2 years on not paying them, and they have recycled my accounts to a variety of CA's and collection attorneys. Even the attorney firms in my state didn't sue me. The last I knew, my accounts were now back out-of-state, across the country, in some other CA firm's hands. I just keep DV'ing everyone. From reading a variety of forums and researcing other sites, it appears that C1 will sometimes wait right up to the SOL, and then decide to request a suit from attorneys or send a 1099. I think the attorney firms often do their own due diligence. I suppose if they discover you have several lawsuits and/or judgments, perhaps they decide your not worth the risk. This might be especially true if you are a BK risk. Unless they are being paid by the hour by the creditor, the attorney's might never see a penny on a percentage contract. At this time, it has been 6 months since I've heard a peep from anyone regarding these accounts.

              Comment

                #8
                I also have a cp1 card account. Fredreick J Hanna and Associates have just sent me a letter. Im scared to death. I owe 857.02. Does anyone think they will sue? Does anyone know if they will let you make really low monthly payments to pay it up? Im going to send them a dv letter tomorrow. I just worry this will make them look at my account more closley.

                Comment

                  #9
                  Quote by 'treehugger1': ..."it appears that C1 will sometimes wait right up to the SOL, and then decide to request a suit from attorneys or send a 1099"

                  Whoa.....NOW I am stumped.... they could send one of those 'lovely' 1099 out of the blue without any sort of 'settlement' with the debtor for a lesser amount ?

                  Comment

                    #10
                    OHBOY: QUESTION. If you never pay them a penny can they send you a 1099?

                    Comment

                      #11
                      'Dylan': I don't know, that's exactly where I am puzzled too and am hoping that 'treehugger' could let us know.

                      Comment

                        #12
                        The answer may be here:

                        If a creditor sends you a 1099-C is the debt 'forgiven' and how will it appear on your credit report? - Answers
                        http://wiki.answers.com/Q/If_a_creditor_sends_you_a_1099-C_is_the_debt_'forgiven'_and_how_will_it_appear_on_your_credit_report
                        The debt is forgiven and sooner or later a notice will appear on the CR. This is not a plus for you rating though. Then there is the IRS involvement gains, losses, blah, blah, blah.It may not be good for your credit report but it is much better than the overdue debt that you had.THE 1099-C IS ANOTHER WAY THE CREDITOR YOU OWE, IS GOING AFTER YOU. YOU ARE REQUIRED TO REPORT THIS UNPAID DEBT AS INCOME ON YOUR FEDERAL TAXES.The IRS form 1099 is used by various entities to report income that they have perceived you have earned. Example: Blah Bank issues you a credit card. You run up $2,000 and never pay. After some time Blah Bank will issue a 1099 to you. They are also reporting the $2000 as income you have earned, to the IRS. A 1099 can be a blessing because no one elsae can come after you for the $2,000, the bad side is that now you may have to pay income tax on the $2000.The IRS requires financial institutions to report to them the amount of principal they charge-off for individual borrowers. It is only to be filed after you have stopped collection activity and there has been no payment activity on the account for three years. This is not a way for financial institutions to try and collect further. It is an added burden on them to track these conditions and find the records when they meet the criteria for filling. The financial institution had written the debt off years earlier.The state law effect of a form 1099-C varies. Connecticut views it as a signed writing that releases the claim, California does not. Kansas views it as having discharged the claim, but the reasoning of the judge in that case was flawed. In any case where a debtor has defenses to assert against a creditor's claim, SOL should be the last one used because its successful use triggers the requirement for the creditor to issue a form 1099-C. If a defense such as lack of documentation is successful, the 1099-C issue is never reached.More information for consumersIf you're receiving one of these, it is in most cases for one of two reasons (my answers are based on the most common form of consumer debt, credit cards--banks may also issue 1099-c forms for mortgages, defaulted student loans, etc.--I have no idea. My post is about credit cards or other debt not related to education or major purchases that require financing):1.) You have a debt that was never paid, or partially paid, sold to a collection agency who still couldn't collect, etc. Whatever--point is, whoever owns the debt is writing it off as a loss. This is not very common because unless you file for bankruptcy, most collection agencies or banks won't simply "give up" on you. If anything, they'll file for a judgment against you for the debt, interest, collection costs, capitalization fees, etc. It is very unlikely that you're receiving a 1099-C simply because the bank said "ah, lets write this one off." With the problems lenders are having these days, no bank is going to surrender debt as a loss. or,2.) You had a collection agency or bank hounding you for money. Hopefully you were smart enough to pay them off with a lump sum instead of making payments that merely cover the interest. Anyway, if you were even smarter, you realized that the principal of the original debt (say it was a $5,000 credit card) was like 33% of the amount they were now demanding, and you cut a "deal" to close the case. Well, say it was a $5,000 credit card, they were demanding $13,500, and you gave them $10,000 to call it even. Well, the difference between the "demand" and your "settlement" is considered taxable income by the government. You have to pay income taxes on that $3,500 that you "gained."Please note--some exceptions do apply--please refer to IRS form 982 (Google it) because there are ways to avoid paying these taxes. Most commonly, if you were insolvent at the time of the settlement (not bankrupt, insolvent) meaning your current liabilities (loans, debts, bills, etc.) outweighed your assets (income, savings/checking accounts, other assets like house, car etc.) you do not have to pay the tax---the theory being that the debt was written off because you couldn't pay. Now if you are making $200k driving a Lamborghini with a beach house and a loft in Manhattan, this would obviously not apply. This is for the people who don't pay off bills, or negotiate settlements for partial payment to close the case, simply because they cant afford to pay off the whole bill.P.S. -- When you negotiate to settle an account, you can negotiate for whatever additional terms you want (nobody guarantees you will get those terms, or that those terms will be honored, but you can try). Potentially the settlement agreement could recite that the amount the creditor is claiming is doubtful and disputed an as a result no 1099-C form will be issued. You could also negotiate that the creditor will not communicate further with credit reporting agencies about the account for any reason whatsoever (keep in mind that "pay for delete" where they actually take it off is much more difficult to obtain), a result that leaves you in control of the reporting and doesn't alert other creditors that you are "putting out" ... (and you should wait to dispute the account until all other defaulted accounts are settled or past the statute of limitations). Ideally, you would also negotiate for a liquidated damages clause in case they fail to honor their agreement so there would be no argument over what they would have to pay you if you took them to court, but good luck getting that one.

                        Comment

                          #13
                          Dylan150: THANKS !

                          Comment

                            #14
                            Remember the 1099-c should only be for the original amount of the debt (stated principal), without the accumulated penalties and interest. They can choose to report the interest but it has to then be itemized and I don't believe that you're taxed on anything besides the original principal.
                            filed chapter 13..confirmed...converted to chapter 7...DISCHARGED!

                            Comment

                              #15
                              catleg:
                              uhhh.... good to hear that !!!!!!!!! I am coming back to life.....Thanks!!!!!!!!

                              Comment

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