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Need Advice on bankruptcy!!

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    #16
    Originally posted by cicy33 View Post
    Not always a good option anymore. used to be, but now they can send you a 1099 for the balance and you now owe income tax on the forgiven amount. Never mind that it is not income, generally it is the interest that has piled up.
    I've never heard of that happening. The Collection Companies will call and call and call, you can tell them that you will settle at a later time, but you don't have the money. What are they going to do, you don't have the money. When you do save some money, settle with them. It does work, you just have to be persistent.

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      #17
      Originally posted by cicy33 View Post
      Not always a good option anymore. used to be, but now they can send you a 1099 for the balance and you now owe income tax on the forgiven amount. Never mind that it is not income, generally it is the interest that has piled up.
      This has always been the case with debt settlement. The creditors are required to issue 1099C's any time they forgive more than $600 on a debt through settlement. This may or may not result in a tax liability for the debtor. If the debtor is insolvent at the time the debt is forgiven it may be able to be excluded from the debtor's taxable income. If the debtor is solvent this income may be taxable. See the IRS website for details, Internal Revenue Service. You may be able to exclude Discharge of Indebtedness income if client can show you are insolvent. For more information on tax ramifications of this program consult a tax preparer, CPA or Tax Attorney or refer to IRS Publication 908 - "Bankruptcy Tax Guide" and IRS Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness available on the IRS website.

      Originally posted by littleroc02us View Post
      I've never heard of that happening. The Collection Companies will call and call and call, you can tell them that you will settle at a later time, but you don't have the money. What are they going to do, you don't have the money. When you do save some money, settle with them. It does work, you just have to be persistent.
      They could sue. Not being an attorney and not knowing the specific laws in the OPs state, I can't say what their exact options are in terms of executing any enforcement of the judgment. Despite JPGs statement that CCs could garnish, this is not always the case. BTW the threat from the payday loan company is a violation of the Fair Debt Collection Practices Act.

      Debt Settlement may be a good option for the OP. Hard to say if there are better options for his circumstances without knowing if he is fully back to work and back up to his regular income.

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        #18
        Bankruptcy does not hinder your ability to get new credit. I started getting new credit offers within 6 months and I started rebuilding.

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          #19
          Sell the cars and buy a beater for cash. Then take that extra $900 and start chipping away at your other debts. You can dig yourself out of this hole without bankruptcy or debt consolidation. It will just take some dedication and sacrifice.
          Brian

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            #20
            Remember if you delare bankruptcy you will be in some serious trouble regarding your credit score for a long time. (7-10 years) It's a last ditch effort to stay afloat. Find another way.

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              #21
              I think that filing for bankruptcy should be your last option as this will affect your future as well as your current position. I would definitely opt for consolidating your debts as this is a better way for you to manage your debt and it allows you to increase your credit rating.

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                #22
                Originally posted by kristy
                Hi,

                For which type of bankruptcy you need advice. is this chapter 7 or chapter 13. Let me know i'll give you proper advice for this.

                Thanks
                It should be neither. There is no use debating the benefits of chapter 7 vs 13, because this is not a situation that warrants bankruptcy.


                OP: "I plan on jumping off a tall building without a parachute or bungee cord and seeing what happens. What do you guys think?"
                User1: "Don't do it."
                User2: "Don't do it."
                User3: "It's not worth it."
                User4: "That would cause more harm than good."
                User5: "Don't do it."
                Kristy: "Well you just need advice. Are you thinking Empire State Building or Willis Tower? Let me know, and I'll give you good advice"


                Bankruptcy should be used for those in truly dire financial position, not those people who are just unwilling to change their lifestyle to pay back what they owe. This poster has more than enough income, assets to sell, and not enough dischargable debt to warrant destroying his financial position by filing bankruptcy.

                Don't do it.

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