When a debtor SETTLES with a collection agency; in this case, for less than half, say 40%, $400; the remaining balance ($600) would either be SOLD to another CA or you will have to pay taxes on it if the CA sends you IRS Form 1099C. In case you don't know, forgiven debt is considered as INCOME to the debtor and thus is subject to Federal taxes.

Now let's move on to the reporting aspect. When you make a "deal" with any CA, the seven-year reporting clock starts over again with the CA. And if you "settle" with the CA AND they sell the remaining balance to ANOTHER CA you will be tacking on ANOTHER 7 years if you pay on that.

Any other questions???

BTW, this site does NOT endorse fraudulent acts on the part of debtors. What we DO encourage is for people to become educated on their legal rights so they do NOT get scammed by a CA into paying on legally uncollectable accounts.

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