Tag Archive | “1099-C form”

Facts about Credit Card Debt Negotiation

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If you’ve been overloaded by credit card debt, then negotiation might seems to be a great idea. But if you do decide to negotiate, prepare yourself for any thing that comes along with it.  Probably you have to make numerous phone calls to your credit card company, you may have to talk to endless managers, and there are possibilities that you may have to agree to terms that are less than ideal.

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It is never said by anyone that debt settlement is an easy task. But before you take any initiative for your Credit Card Debt Negotiation, there are some facts that you should know.

There could be more reduction in your Credit Score.

At first when you contact the credit card company for your debt settlement, it’s likely that they’ll freeze your credit limit immediately. That won’t matter so much in case if your cards are maxed out. But if you’re well below your maximum credit limit, then there could be a sudden fall in your credit score as a result of the lower limit.

Probably You might have to pay taxes.

If you have been succeeded in negotiating a lower sum for your debt repayment, then you might have to pay taxes on the portion of the debt that was forgiven. A lender file a 1099-C form with the IRS whenever they forgive $600 or more of the principal.

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What You Should Know about Credit Card Debt Negotiation?

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If you are facing any problem due to credit card debt, then there is a great idea for you to come out of it and that is negotiation. But if you are willing to have a negotiation then it is necessary that you prepare yourself for a long and bumpy road. The probability is that you might have to call several times to your credit card company, talk to several managers, and you may also have to agree to terms that are not very much ideal for  you. It is never said by anybody that debt settlement was easy. But before you take your first step towards negotiation, there are some things that you should know.

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Things You should Know about Credit Card Debt Negotiation

You may face a sudden fall in your credit score.

When for the first time you contact your credit card company in order to settle your debt, it is expected that they’ll freeze your credit limit right away. So you should get ready for that. If your cards have reached the highest amount level, that won’t matter so much. But if you’re well below your maximum credit limit, then it could become the reason for the sudden fall in your credit score and that just happen as a result of the lower limit.

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