Settled my PayPal debt 1.2k for 400 bucks… good deal or nah?

Called up Synchrony Bank, and they gave me a deal on my $1,200 debt—settle it for just $400! They’re letting me pay it over three months, so $160 each month. Couldn’t believe it!

Good for you! Now just stay on top of things so you don’t end up in debt again. Use this as a fresh start!

Were you already behind on payments?

Zuri said:
Were you already behind on payments?

Yeah, I was behind.

What does this do to your credit score?

Jalen said:
What does this do to your credit score?

I’m curious because I’m in a similar boat right now.

Jalen said:

Jalen said:
What does this do to your credit score?

I’m curious because I’m in a similar boat right now.

It’ll show as settled for less, which isn’t as good as paid in full. It’s better than nothing, but it will hit your score, maybe by 50-100 points.

@Alexis
How long does that drop stay?

Keller said:
@Alexis
How long does that drop stay?

It’ll be there for seven years, but you can try sending a goodwill letter asking for removal if you paid in full. If not, aim to get it off your report if you can.

@Alexis
Over time, good credit habits will help boost your score back up. The negative impact will lessen as other positive credit is added.

@Alexis
So is it better to just pay it all off if you can?

Jalen said:
@Alexis
So is it better to just pay it all off if you can?

Try to negotiate for less, but get them to remove it if possible. Paying in full is good, but only if they agree to delete it from your record.

Heads up, you’ll get a 1099 form for the amount they forgave, and it’ll be taxable.

Miller said:
Heads up, you’ll get a 1099 form for the amount they forgave, and it’ll be taxable.

Exactly, that $800 will count as income and get taxed!

Just a heads up—you’ll get a 1099-C for the forgiven debt. Learned this the hard way with my own debt.

Harper said:
Just a heads up—you’ll get a 1099-C for the forgiven debt. Learned this the hard way with my own debt.

Yep, been there too!

Honestly, they gave you that loan in good faith, and now you’re just bragging about not paying it all back.

Peyton said:
Honestly, they gave you that loan in good faith, and now you’re just bragging about not paying it all back.

Why’s that a problem? I got a settlement.

Zane said: