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Today’s financial institutions are massive and while much of the business is automated, there is still the human element of errors that can arise. So, for your own protection, it is imperative that you KEEP GOOD RECORDS.
When an agreement is reached with a creditor and the final payment is completed at some point, you will receive a 1099 tax form provided by the creditor. Present this statement to your accountant or tax professional. We suggest that you speak with an accountant or tax attorney. The 1099 is your proof that all or part of the debt was forgiven. It’s a good idea to keep your statements in case the original creditor sells the debt and a collection agency tries to contact you. If that happens, an accountant or attorney in your home state should respond to the collection company’s 30-day letter stating the debt was forgiven with a copy of the 1099.
To quickly improve your credit rating while you complete your Debt Settlement Program, we suggest you contact the creditor and request a letter stating “You have completed your obligations” 30 days after making a final payment on an account. Hence, send a copy to each of the credit bureaus. Within 3-5 months, that change should be reflected on your credit report. You don’t want to wait until the show ends, you can do it after each sale is complete and be ahead of the game. N’oubliez pas; keep this letter for your records.
In addition, you will want to keep a copy of each settlement letter your Debt Settlement Company provides for your own records. There may be times when a creditor has not updated all of your information and seeks to continue collecting on a settled account. At that point all you have to do is provide the creditor with a copy of the settlement letter as well as the “completion” letter provided by the original creditor and the 1099 if you have received it and again have an accountant or attorney in your state. of residence must respond to the collection company.
One of the reasons many people find themselves in financial debt in the first place may be due to poor record keeping and the lack of discipline that comes with it. Keep good records, and in the long run, you’ll be glad you did.