Recent Posts in tax Category
| March 06, 2010 |
| Debt Settlement Article |
| Posted By Robert Kovacs |
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I came across an article this morning about Debt Settlement on Yahoo. It has a good explanation of what to REALLY expect from the Debt Settlement companies.
http://finance.yahoo.com/banking-budgeting/article/108975/can-you-settle-credit-card-debt-for-pennies?mod=bb-creditcards
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| February 24, 2010 |
| Settling a Debt for less than you owe can cost more than you think |
| Posted By Robert Kovacs |
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Yes settling a debt for less than you owe will save you money but it is not going to save you as much as you think.
When you settle a debt with your credit card or other creditors for less than you owe the amount forgiven is taxable income.
For example if you owe Bank of America $20,000 and they forgive $10,000 the forgiven $10,000 is treated as income to you which you will pay taxes on at year’s end. The creditor will issue you a 1099.
Also debt settlement for less is reported on your credit report and can negatively impact your credit score.
In bankruptcy debts are discharged through a court order. Discharged debt in bankruptcy will not be taxed or reported as income.
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