Earlier this year I had some financial troubles that resulted in settling with Chase, BofA and AmEx for less than the outstanding balance. On my credit report BofA is listed as Paid as Agreed with settled for less than full balance in the comments. Both AmEx and Chase are listed as Charge Off with the same comments. I already received a 1099 from AmEx. Since they have the accounts listed as Charge Off on my credit report is there any way they can sell the remaining debt to a collector or am I clear except for the taxes owed on the amount over $600?
The short answer to your question is no, you need not worry about your creditors selling the difference in your forgiven or settled debt.
Here is why: When a creditor and debtor agree to a debt settlement, the difference between the existing balance and the agreed-upon amount is not an asset that a creditor can buy, sell, trade, or give away. It is a loss on a spreadsheet, a potential 1099-C filing it will report to the IRS, and nothing more.
Should the creditor do as you suggest it would commit two counts of fraud. The first victim would be you because the creditor promised to forgive the remaining debt in exchange for a payment from you. The second victim would be the collection agent it sold the debt to because it was misrepresenting the collectability of the debt it was selling.
In summary, you have more urgent and important things in your life to keep you awake at night than what happened to the balance of your forgiven debt.
I hope this information helps you Find. Learn & Save.