If you try to negotiate with a creditor for a payoff, will this cause a negative impact on your credit report? I was told the by a person with Bank of America
2007-03-14 08:13:45 · 5 answers · asked by themilhouseman 2 in Business & Finance ➔ Credit
what if you are wanting to pay if off and are negotiating a payoff of say .60 on the dollar?
2007-03-14 08:18:42 · update #1
no i am not in collections just going to pay off cards to get away from the evilness they have...LOL
2007-03-14 08:22:41 · update #2
Are you trying to negotiate a lower payoff then what you owe them? If so, yes, it could have a negative impact on your score.
For example, you negotiate to repay a $1500 debt for $1000. They agree and you send them $1000. They are going to write off the other $500 and it could show up on your report as a debt that was written off.
Also, the IRS has ruled that debt that is written off is taxable income you you could also owe taxes on the $500. Not all of them even bother sending out a 1099 - C but if you get one, you have to include it in your income taxes next year.
2007-03-14 08:19:36 · answer #1 · answered by Faye H 6 · 2⤊ 0⤋
I agree with everything Faye said.
I just wanted to add that when you negotiate to pay a lesser amount, also request that they will delete the tradelines they have placed on your credit reports upon payment.
If you are dealing with a collection agency, they will probably agree to delete (they often do) If you are dealing the original creditor it may be harder to get them to agree to delete.
Just be sure to do everything in writing and send everything certified mail return receipt - papertrail !!
A paid negative is no better than an unpaid negative.
2007-03-14 09:31:15 · answer #2 · answered by echo 7 · 0⤊ 0⤋
yes. If you are negotiating for less than what you owe then you are probably negotiating with a collections agency. If your loan has been sent to a collection agency your credit is already trashed.
credit card companies wont negotiate. You may be able to get you interest lowered though. If not tell em you are gonna take your bussiness somewhere else.
2007-03-14 08:20:28 · answer #3 · answered by heybulldog 5 · 0⤊ 0⤋
Of course. You failed to pay a valid debt.
It will also have a tax impact. The portion of the debt forgiven is considered income and the the creditor will report it as such to the IRS
2007-03-14 08:21:30 · answer #4 · answered by Box815 3 · 0⤊ 1⤋
Absolutely not as long as you continue to pay on time.
2007-03-14 08:16:49 · answer #5 · answered by Glennroid 5 · 0⤊ 0⤋