Category Archives: Tax

The Taxman Cometh, Even in Debt Resolution

      The old adage about the certainty of taxation is also true in debt relief. When a creditor cancels a debt, the Internal Revenue Service considers that to be taxable income. It’s also called “debt forgiveness income.” As discussed in a previous post on Debt Settlement, if you agree to settle a debt…

Should You Settle with a Debt Buyer?

Let’s say you’ve just been served with a debt collection lawsuit. The company suing you is a debt buyer, a company who claims it purchased the right to enforce a debt you ran up on a credit card or other credit account. You’re being sued for about $7500. But you’ve read on the Internet or…

Debt Settlement? Look out for Tax Liability!

debt settlement look out for tax liability

I have been receiving calls from people who are looking into settling debts with creditors for less than the complete amount owed. This is sometimes possible, and sometimes a good idea. However, people are surprised to find out that they may be creating income tax liability by doing this. Yes, it’s true: debt forgiveness is…

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