Originally Posted by Kevin-SFBucks

Just as an FYI.. no one touched on this.

When you settle a debt with an organization.. whatever debt is "written off" is considered a taxable asset against you.

Example... you owe AMEX 100,000. You settle with them for 40,000 (cool.. less money, right???).. You still are on the tax hook for the 60,000 that was written off by AMEX. The government considered that as taxable income to you.

Just thought you should know that part. And yes you will get a 1099 in the mail from AMEX or whomever at the end of the year for this situation. You can't avoid it.