Which is better sending a letter of validation to a creditor or requesting a pay for deletion settlement?

Question

My Husband has 12 accounts in collection. 9 of the those are for medical bills associated with his epilepsy. All are over 2yrs. We are not sure how to start fixing this. Should we send a letter of validation first and then try the settlement or not even worry about validating the debt?

Answer 1

The answer would be: pay-for-deletion as most accounts are not super-old and are with hospitals.

Hospitals in general have very SLOW collections. As a result, there is greater likelihood that they would be willing to work with you towards a mutually agreeable settlement.

Note that most charges from hospitals are highly overstated and included unnecessary overhead.

If Medicare pays $0.20 on the dollar for services, why shouldn't you negotiate for the best final price for your medical services

Go for pay-for-deletion. I have included a link to get you on your marry little way.

Answer 2

One point about settlement agreements: you are liable for income tax on the savings you receive as a result of the settlement. For example: you had a $1,400 bill, and you settle it for $600. You're liable for tax on the savings of $800 = $1,400 - $600.

The Collection Agency (CA) must report your savings to the IRS and state tax authority. It doesn't matter much if you don't receive a copy of the report from the CA, so keep good records.

Mechanism: the IRS receives the report of your savings, and you must declare the same savings on your income tax return. If you don't declare, and the IRS matches your records and finds the discrepancy, the IRS can come after you for the tax plus penalties and interest. It can take 3 years to catch up with you, plenty of time to rack up interest. Once they catch up to you, they expect immediate payment of the balance due. If you can't pay, it's time for wage garnishing or a tax lien. It's very rare that they send someone to jail. They usually make the non-payment a civil matter, not a criminal one. And your state and the IRS routinely trade information.

I suggest your going to a message board that specializes in tough credit collection issues like yours:

www.creditnet.com

I have no financial or legal connection to them.

Answer 3

the way the credit regulations artwork interior the country are one hundred% on your part not the colectors, in the event that they don't look to be responding to then you definitely redirect your letters to the credit beurro and dispute the claims as inaccuret, the prefer usuall get letters back frim the lenders the 1st 2-3 requestd, yet after that its very uncommon that the creditor respond, the 1st time that they dont the credit beuro via regulation has to eliminate the line merchandise, after which you dont might desire to pay the debt in any respect, this in basic terms works for revolving credit, not for autos or residences.