Great advice. The debts are credit cards that had limits of $750 and $700. Both have fees that are nearly $200 to $300 over the limits. I will consider the settlements only if they won't report it to the IRS as income.
To the Asker:
Review IRS form 982
Thank you sir. I will. I have been through this before and I am just taking precautions. Those forms are too much of a hassle when tax filing comes around.