Settled credit card debts
I want to settle a credit card debt with a collection agency and the credit card company still owns it. After we agree on a settlement, I will send them a letter of agreement that states they are authorized by the credit card company to do this and they will remove it from my credit report. I saw a sample letter on creditinfocenter.com called "agreement to compromise debt". Is this the best way to handle this?
Also, will I have to pay taxes on the balance of the debt?
I am also thinking about doing this with a collection agency that does own the debt. Is there any difference on the way that would be handled?