Today’s financial institutions are massive, and while much of the business is automated, there is still the human element to the mistakes that can arise. So, for your own protection, it is imperative that you KEEP GOOD RECORDS.

When an agreement is reached with a creditor and the final payment is completed at some point, you will receive a 1099 tax form provided by the creditor. Present this statement to your accountant or tax professional. We suggest that you speak with an accountant or tax attorney. The 1099 is your proof that all or part of the debt was forgiven. It is advisable to keep the statements in case the original creditor sells the debt and a collection agency tries to contact you. If that happens, an accountant or attorney in your state of residence should respond to the collection company’s 30-day letter stating that the debt was forgiven with a copy of the 1099.

To quickly improve your credit rating as you complete your Debt Settlement Program, we suggest that, 30 days after a final payment is made on an account, you contact the creditor and request a letter saying “You have completed your obligations.” . Thereafter a copy to each of the credit bureaus. Within 3-5 months, that change should show up on your credit report. You don’t want to wait until the show is over, you can after each deal is complete and be ahead of the game. N’oubliez pas; Please keep this letter for your records.

In addition, you will want to keep a copy for your own records of each settlement letter provided to you by your Debt Settlement Company. There may be times when a creditor has not updated all of their information and may try to continue collecting on a settled account. At that point, all you have to do is provide the creditor with a copy of the settlement letter as well as the ‘completion’ letter provided by the original creditor and the 1099 if you have received it and again have an accountant or attorney. in your State of residence you must respond to the collection company.

One of the reasons many people find themselves in financial debt in the first place may be due to poor record keeping and the lack of discipline that comes with it. Keep good records, and in the long run, you’ll be glad you did.