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TexLaw
TexLaw, Attorney
Category: Legal
Satisfied Customers: 4430
Experience:  Lead trial/International commercial attorney licensed 11 yrs
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I received a commission of 24k from an insurance company I

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I received a commission of 24k from an insurance company I represent later the case cancelled and I had a charge back of the commission on paper, this was 2 or 3 yrs ago and things have changed for me financially and I have not been able to pay it back it is now on my credit report under both the insurance company and the collection company at 32k, interest. My concern is whether to try and negotiate and settle for a lesser amount and with which company? will this be a negative or positive on my credit score to settle a lesser amount, I was told the difference not paid would be declared as income with the IRS and I'm not sure of the effect to my insurance license status as I am still in the business and would like to get back on my feet.
Hi,

Thank you for your question.

You are correct. If you can negotiate a settlement on a debt owed, the amount of the reduction will be credited to you as income, which will be reported to the IRS on a 1099. You will be required to list it as regular income on your income tax statement and will need to account for it accordingly.

If you do settle these debts, it will affect your credit score. However, your score is already damaged by the overdue payment for this account. Thus a settlement will not damage your credit further. The settlement will not drastically improve your credit score either, and it will be listed on your credit report for a term of 7 years. The older the listing becomes, the less of an effect it will have.

So, settlement is a good idea if you can achieve it, as settling the debt is better than having an open uncollected account on your credit report.

Please let me know if you have any further questions. Please also kindly consider rating my answer positively so that I am compensated by the website for my work on your question. Rating positively does not cause an additional charge and does not prevent us from further discussing your questions.

Best Regards,
ZDN
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