Is an Offer in Compromise (OIC) right for me?
- What is included
- Things to think about
An OIC is where you offer less than what you owe to compromise the full balance. For any creditor to accept less than what you owe, they must first determine your reasonable collection potential (RCP), or the maximum amount you are able to pay. Your RCP includes your monthly ability to pay, all your assets and the equity, along with your future ability to pay. Before submitting an OIC, you may want to calculate your own RCP and compare it to your offer. This will help you determine if an OIC is right for you, because not many creditors will accept an offer that is less than the RCP.
So, you have decided to submit an OIC, here are some things to check before mailing off your package. Are you in compliance with filing, a requirement before consideration. You will need to know the years you owe for, come up with an offer amount, decide on a payment plan, how will you fund the offer and can you meet the 5 year post compliance requirement. In addition to the RCP, other items like age, employment/history, education, medical issues and special circumstances will be considered. If the OIC is not accepted, be aware that the statute will be extended for the period your offer was under review.
It is highly recommended that you read the OIC Form 656 booklet, to familiarize yourself with the OIC process. You don’t want to waste your time and money on an offer you cannot pay or meet the requirements of. If you decide to hire someone to complete your OIC, be careful how much you pay and what they will do for you.
If you have questions or would like to attend a workshop, call me, Nathalie Raygosa, I run Collection Alternatives at 559-614-7729 or visit my website at collectionalternatives.com.