I owe 15,000 in a credit card. Will they reduce my balance if I want to give them a lump sum of 10 grand?

Question

Will that affect my credit report, and will I be taxed?

see pople say that they have talked to the creditors and they reduce their debts without further consequence

i have never been late on my payments. The person at the credit company told me that the ammount "forgiven" will be counted as a monetary gift to the IRS that is why they will tax me.

I live in California, and I am dealing directly with the Credit card company. They are willing to settle, but they say, why would I want to do that, and ruin my good credit. I always pay on time.

Answer 1

Yes. but there are only certain circumstances where they will negotiate with you. For example, you could not settle and keep using the credit card.
They will negotiate with if you stop making payments, they really don;t have any reason to budge if you are current. It is likely that they would accept your 10k to settle your debt. Like I said though, the account will be closed. It will be reported to your credit as a charge off or "settled for less than amount due", which is a negative in itself, about 15-30 points. If there are late payments involved it will cost more points.

Answer 2

are you actually dealing with a the credit card company or a third party collector. Credit card companies will never settle,---if some how you are dealing with them yes pay then 10 grand then see if they will lower your interest way.

Now if it is with a collection agency get back on and submit another answer with the following info,
last payment made? and what state you live in? how old the debt is then you will get some better advise.

Answer 3

Probably not. Why should they?

If it's in default and they have sold it to a collection agency, they might accept a lump sum payoff below what you owe. But that will show on your credit report, and you might end up owing taxes on the amount of debt that was cancelled.

What you have heard is possibly that credit card companies sometimes lower INTEREST RATES if you ask them to - that would not have any negative consequences.

Answer 4

If you owe 15,000 and pay them 10,000 then you will still owe 5,000.

Why would you expect to pay tax ?

Depending on the circumstances you might negotiate to settle the full debt for $10,000. They may choose to reduce the interest owed.

Answer 5

You might be able to get them to settle, you will pay tax on the difference and it will ruin your credit.

Answer 6

I think that's the BEST thing you can do for yourself.

Ask them about it, they do want your money, so definitely pay it off ASAP.

BUT that 10K better not be loaned from somewhere else.

Answer 7

yes, they will take 10 grand off. guess what happens if you pay nothing!

Answer 8

not rly no but if u pay about 20k they'll clear it