We are trying to negociate 50,000 credit card down to 25,000. Is it true that you need to pay taxes on the amount settled to the IRS. See post below:

"Do you have the settlement amount in full? When you try to negotiate settlements, often times you need to have enough
funds to make large payments. Additionally, be aware that any "forgiven" debt by the OC is considered taxable income by the IRS"

The IRS has just issued a new publication 4681 to cover this issue.

Is it possible to have the actual amount owed lowered? Does it affect your credit score?

Beware of settlements, if you settle your debt with a creditor it will be income to you and you will be reporting that income on your next tax return. Also your credit rating/score will take a major hit at the same time. Which means that the next time you apply for credit you will be paying a higher interest rate because you are a greater risk.

Did you use a form letter like the one below?

http://www.creditinfocenter.com/forms/sampleletter6.shtml

(Sample letter 6 to use when settling debts yourself with a collection agency)

It’s okay and could suffice; however, it could be just a little bit better. The terms for payment are ambiguous. The language insinuates that payment is to be made as a lump sum, but, the date the agreement was written could be a year before the total amount is due. The terms for payment should be set forth more clearly as lump sum or as monthly installments in whatever amount. And, having said that, there is no date in the terms of the agreement setting forth when said terms were agreed upon. The date at the signature line is not sufficient. And finally, there are no terms set forth for the method of collection if Debtor fails to pay to Creditor the sums owing on or before the due date and who is responsible for attorney’s fees if any should be incurred, which, actually, is to the benefit of the Debtor…

Debt Negotiation or Settlement is not easy to do yourself with collection agency or creditor. You might be able to convince them to negotiate but then they will ask you to pay all in full at once. For example if you have $10,000 in credit cards and your creditor agrees to take $7,000 from you… They will expect you to pay all in full… Right now, if you are facing problem paying these bills… Your best bet is to call a debt settlement company and let them do a job… Here is a good one www.DebtCareUSA.com

I just looked at my credit report and although fairly good there are a couple of things from my marriage that I want to get cleaned up. The other person wont do it.Nonetheless. I know I can negotiate a lower pay off. Any advice?? Sample letters even?":) Precentage that is fair? I really dont know where to start.

First, find out what the statue of limitations is in your state for debt. You can check the link below to find out.

http://www.creditinfocenter.com/rebuild/statuteLimitations.shtml

Those that our past the SoL you are safe from, as you no longer have a legal obligation to repay that debt. One trick I've heard of is to send these collection agencies a CMRRR (certified mail return receipt request) stating that the debt is past the SoL, but demanding that they validate the debt per the Fair Debt Collection Practice Act.

I've heard of people who have done this and the collection agencies simply give in and remove the listing, since they know it's past the SoL and they don't want to waste the time to validate.

As far as negotiating the debt, I'd start at 30% of the balance you owed (not including any interest and fees they have tacked on) and work from there. Make sure that in exchange for payment they delete the negative mark (not simply show it as paid) from your credit report and consider it paid in full.

Below are 3 links that you will find helpful. They include information on negotiation, pay for delete agreements and sample letters.

http://www.creditinfocenter.com/repair/

http://www.creditinfocenter.com/rebuild/

http://creditinfocenter.com/forms/

How , Who & what Leverage do I have, when I call the Collecters Department if i want to take off a Negative Debt off my credit report once I pay it off? How do I get a guarantee out of them that it won't just say paid off.

Reality is, they could give a crap less about you, your credit report or anything until it IS paid off. Then they might talk to you about removing it. And if it is already on there, it will be on there for 7 years. Good luck, I would rather saw my arm off than to talk to those people. lol

Websites, companies, hitmen, any help is welcome. Also, what would be a good precentage to begin with as a pay off amount?

Check the following link as it has excellent information on collection settling, as well as debt validation. Make sure you validate these debts first to make sure you own them:

http://www.creditinfocenter.com/debt/settle_debts.shtml

Credit Solutions – a company that has been sued by its clients. Just because they were on the TODAY show doesn't mean they are legit. The BBB has given them an unsatisfactory rating. See link below. Credit Counseling services do the same thing to your credit as Debt consolidation. It leaves what is called a "third paarty intervention" mark on your credit. FYI, that is a very bad mark on your credit history – up to 7 years on your credit after you are done with their program. It's as bad as a vehicle repossession. You are also paying interest on the interest you have already paid the credit card companies.

If your accounts did not go into default – why would they settle for a smaller amount? The credit card companies want you on their treadmill – paying their interest – and keeping you supporting their paychecks. They accually TARGET people they know can't possibly pay them back. Check out the movie – MAXED OUT.

There are other options.