November 16, 2010 2:31 pm at 2:31 pm #593061silverliningMember
I have heard USDEBT911 is good for settling debt. Has anyone had experience?November 16, 2010 5:44 pm at 5:44 pm #710088squeakParticipant
Are you sure you want to settle your debt? Just because it is advertised as the greatest invention since the credit card swipe, doesn’t mean it’s a good idea for everyone.November 16, 2010 6:13 pm at 6:13 pm #710089
do not settle your debt!!!! the IRS looks at settlements as profit and charges you tax. for example, if your debt is sixty thousand and you pay only thirty thousand, you will be taxed on the other thirty thousand and the settlement shows on your credit score for seven years and lowers your credit score.November 16, 2010 6:58 pm at 6:58 pm #710090WolfishMusingsParticipant
I know nothing about the company mentioned in the OP — good or bad. Nonetheless, I would strongly advise speaking with a professional financial adviser before engaging in debt settlement.
The WolfNovember 16, 2010 7:18 pm at 7:18 pm #710091
bh18 – not necessarily. look up IRS Form 982 and speak to an accountant.
For example if you have a credit card with a balance of 60,000 and settle for 20,000, you will – as bh18 correctly said above – get a 1099 for the 40,000 you saved and which counts as income. However if you can show that at the time of the settlement you were insolvent (your remaining liabilities exceed your assets by at least 40,000) then you dont have to pay one cent of taxes on that money.November 16, 2010 7:23 pm at 7:23 pm #710092ZachKessinMember
Don’t use a debt settlement company! They are mostly scams. They charge huge fees and often don’t do what they say they will. If you have too much debt go buy a copy of “The total money make over” and read it cover to cover.
You don’t need a debt settlement company, you can settle the debt yourself by calling the company and offering them cash. Just get it in writing and don’t let them have electric access to your bank account.
Go listen to the Dave Ramsey show for a week if you have too much debt, and pay it off.November 16, 2010 7:51 pm at 7:51 pm #710093
coffee room fan: i checked and you are right but it’s too late for me. best solution for anybody is to do what my ex did. settle on your debt then put it on your ex wife’s name (have some girl call with her info) so she’s left with the remainder of the debt and the IRS fee!!!November 16, 2010 8:01 pm at 8:01 pm #710094smartcookieMember
That’s horrible.November 16, 2010 8:04 pm at 8:04 pm #710095
bh18 – ouch! Your ex-husband really had someone else call to put it under your name??? sick!
if it was in the last few years and if you were insolvent at the time, maybe you can file an amended return with form 982 and get back whatever taxes you paid. talk to an accountant.November 16, 2010 10:53 pm at 10:53 pm #710096
coffee room fan: you sound like a better accountant than i had before. thanks for the tips and yes it was in the past few years. i’ll be calling an accountant soon, b’H. thanks.November 16, 2010 11:10 pm at 11:10 pm #710097
bh18 – its pretty incredible that I’m a better accountant than you had especially since I’m not an accountant. 🙂
you’re very welcome for the tips. I hope it will lead to your getting a big refund. please keep us updated if you dont mind.November 17, 2010 12:12 am at 12:12 am #710098ronrsrMember
you might receive some relief under the Innocent Spouse Rule, especially if it was clearly done without your knowing.
You have two years to invoke that from the time they start trying to collect the money due.November 17, 2010 7:05 am at 7:05 am #710099silverliningMember
They dont look like scams – visited their office, whole bunch of frum guys – also accountants. They warned me about the 1099 – but the numbers still make sense – if someone used their services, I would really like to know. They seemed to be very busy working on hundreds of files.November 17, 2010 5:03 pm at 5:03 pm #710100ShmoontchkaMember
They took care of 2nd mortgage from 47k to 9.7k!!!!!!!!!!!
Truly got us out of the hole! I will gladly pay them.November 17, 2010 8:21 pm at 8:21 pm #710101apushatayidParticipant
B”H I am not in a situation where I would need the services debt settlement companies advertise. However, one thing that always struck me as being odd with the business they are in is, if they can negotiate a settlement on your behalf, why cant you negotiate the same settlement yourself? Do you need special training or licensing to offer this service?November 17, 2010 10:49 pm at 10:49 pm #710102TheChevraMember
What negative reprecussions, if any, are there to settling a debt — whether it is done yourself directly with a lender or through a third party negotiator?November 18, 2010 12:09 am at 12:09 am #710103
apushatayid – you absolutely can do this yourself. maybe an experienced firm can get you a better deal than you can get on your own, I don’t know. However beware of scammers. There are many of them around, unfortunately even heimish frum ones who will literally take your money and run. They prey on people who naively trust anyone heimish. I learned that the hard way. I don’t know anything about the one mentioned by the OP though. The fact that they have an actual office is probably a good sign.
1. negative repercussion is that your credit rating will be shot for a few years so if you were planning on buying a house or need a car loan fuggetaboutit.
2. if you are not insolvent – see my post above. In that case you could end up with a huge tax bill.
3. you need to come up with lots of cash during a short period of time. Suppose you have 100K and settle at 20% as an example, you’d need to come up wth 20K quickly.
side point – if you cant come up with the cash to settle, some banks will let you close the account and make minimum payments until the balance is paidf in full – with very low interest and no fees. they figure its better for them to get back all their money that way rather than take a loss. They will only do this if you haven’t made a payment in 4-5 months though. Don’t wait longer than that because once it goes to an outside collection agency you wont get such a deal.
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