Q: I have a question about settling a credit card debt.
I have a closed cc with jp Morgan that's over a year old for 5400.00. Today I received a settlement offer from collection agency for $580.00. I know there can be tax implications and it will impact my credit score, but other than that, are there any other negatives for accepting this offer? Can they consider that payment as admitting I owe the debt and retract the offer after I pay it then still come after me for full balance?
A: A settlement offer is that - an offer to settle the account. The offer must be in writing, which I assume it was, judging by your post. If you comply with the offer, they cannot then retract it. You should keep all correspondence, to include your response(s) and a copy of the cancelled check, for at least 4 years. If JP Morgan sends you a 1099 at the end of 2020, then I wouldn't worry about JPM suing you for the balance, but because you are dealing with an agency you can't be too careful.
If the offer to settle was made over the telephone, get it in writing before you pay a dime in settlement. A bona fide collection agency will put it in writing.
Bruce Alexander Minnick agrees with this answer
A: On a positive note--this offer to settle an old debt of $5,400 for only $580 is the best one I have seen yet. So long as you get it in writing you should consider paying it--if for no other reason than peace of mind. Keep in mind that once you agree to pay it, you must pay it; and if you do not, JPMorgan can come back at you for the ENTIRE $5,400.
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