Debt Settlement ??'s

[jacqmar]

What is the name of your state? IOWA

About 2/3 years ago, I filed BK but did not appear for personal reasons. I settled with 3 creditors and I have not heard from any others. Who/How do I settle with the remaining creditors, I have not seen my credit report. Is it possible by settling with the creditors my FICO score will increase? I think the BK will be on the report, correct? I was thinking if all this is possible I could apply for a home equity loan to pay federal & state taxes and settle my old debts, is this possible or is it all a pipe dream. I am retired and need help paying my taxes and the possiblity of additional taxes on uncollected debts. I have seen ads for debt settlements, are they legitimate? It doesn't seem feasible this can be done, but I thought someone here could give me some insight on my case.

 

[Ladynred]

Is it possible by settling with the creditors my FICO score will increase?

No. In fact, 'settled for less than full amount' is a NEGATIVE on your reports and it is never going to help your scores.

I think the BK will be on the report, correct?

Most definitely .. for 10 years.

I was thinking if all this is possible I could apply for a home equity loan

You've got settlements, charge-offs and collections on your reports, as well as a dismissed BK, I'd be very surprised if you can get a loan of any kind.

the possiblity of additional taxes on uncollected debts.

Unless the creditors you settled with filed 1099-C's, then you have no tax repercussions from the 'forgiveness' of the remainder of those debts. Even if they do send a 1099-C, if you can prove to the IRS that you are insolvent, then you would not have to claim the forgiven debt as income.

I have seen ads for debt settlements, are they legitimate?

No, 99.9% of them are SCAMS and they will do you more harm than good and charge you out the wazoo for the so-called 'service'.

For the federal taxes, I suggest you find yourself a taxpayer advocate and see what can be worked out with the IRS.

 

[jacqmar]

Thank you Lady in Red, you always give direct answers even though they aren't always what I want to read.

I have another question. My only income is my pension and is it protected from tax levies, federal and/or state? Also, I have a small amount of rollover retirement funds in an IRA, will this be protected? What can I do to protect my home?