Question

So my only debt is collections which is getting paid off with my refund. Has anyone paid off collections? Do you pay the full amount or try to settle? Also in paying off collections will they automatically notice the credit bureaus? Thanks for any input.  

Answer 1

I recently paid collections that was not reported to my credit yet and I just paid in full. On another post in this group, people said that if you settle, you have to report it as income on during tax filing next year. Not sure how true that is but worth calling out to research more.  

Answer 2

Before you pay off, make sure the company tells you they will delete it off your credit report and have it in writing. You might pay it off and it’ll still stick around.  

Answer 3

If you settle they will send you a 1099 next year and you have to add it as income. Make sure it doesn’t throw you into a higher tax bracket.