What is an offer in compromise?

An offer in compromise (OIC) is a debt relief option that allows a debtor in Washington to settle their debt for less than the full amount they owe. An OIC is an agreement between the debtor and the creditor that settles the debt for a smaller lump sum, or in installments over time. When a debtor suggests an OIC to their creditor, the creditor must consider their financial situation and the impact of a potential full collection of the debt. The creditor then decides whether to accept the proposal. In most cases, an OIC is accepted if the creditor believes it to be a more beneficial arrangement than taking the debtor to court. If an OIC is accepted, the debtor and the creditor enter into a legally binding agreement, which outlines the terms and conditions of the agreement. This agreement should also include information about when the debt will be considered paid in full, as well as any applicable fees or interest. An OIC is not applicable in all situations, and it is important for a debtor in Washington to be aware of their legal rights. If a debtor is considering an offer in compromise, they should seek counsel from a legal professional or a credit counselor to determine if it is a suitable option in their situation.

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