Wife just talked to a couple of the credit card companies we have debt with. In chatting with them and agreeing on a lowered ""settled"" amount, the agent mentioned something to her that she wasn't sure about and not comfortable with;
1. they mentioned the difference in outstanding principle and the settled amount it taxable income
2. Agreeing with the amount, once reported to the credit bureau, i.e. Equifax, etc., it will decrease your credit score instead of, in my understanding, increasing your credit score because of overall lowered debt.
Any of this make sense or is it a scare-tactic?