Posted on November 27, 2009 at 5:12 am credit card settlement tax implication - is debt settlement taxable?

Posted on November 27, 2009 at 5:13 am credit card settlement tax implication - is debt settlement taxable? It is possible but if you are insolvent, you can file the IRS form 982 and that may exempt you from paying taxes on the savings from settling.

Posted on November 27, 2009 at 5:21 am credit card settlement tax implication - is debt settlement taxable? I see, thank you, but what do you mean insolvent?

Posted on November 27, 2009 at 5:23 am credit card settlement tax implication - is debt settlement taxable - insolvencyInsolvency is when the value of your liabilities is more than the value of your assets.

Posted on November 27, 2009 at 5:28 am credit card settlement tax implication - is debt settlement taxable - insolvencyHey you might want to see a tax specialist for this and ask how much you can save from settlement after the tax has been satisfied. Just to give you an idea though, you have to pay 25% of the settled amount to the IRS.

Posted on November 27, 2009 at 5:30 am I see...I can save huh? I was beginning to think that perhaps debt settlement is not worth it if I'm being taxed anyway.

Posted on November 27, 2009 at 5:32 am It is worth it, you just have to understand the whole concept, and speaking of which - you can speak with a debt consultant and also get matched up to the right settlement company for free - just fill out  a form.

Posted on January 29, 2011 at 10:38 am First, anytime you are ever told that you should not take a financial gain because of tax implications - it is almost invariably wrong.  Many people think they shouldn't make more money, use stock options, settle debt etc. because they will have to pay taxes.  You only pay taxes as a percent of money made - so it is always worth it.  If A genie came out of a bottle and said he would give you $100,000, but 30% would be taxed - would you say no?  Of course not, and the myth of tax brackets is incorrect.  If you go into a higher tax bracket, you are only taxed on the amount in that bracket (the new money), not the money you have already made.  As far as this goes - many credit card companies and their related "shadow sites" say you will be taxed on debt forgiveness.  It's possible, but nearly all people who need debt settlement (and nearly all Americans) have more debts than assets - so it is very likely you will qualify for insolvency and not have to pay taxes on this amount.  Don't listen to sites that try to tell you otherwise - I guarantee they have adds and links to their credit card partners.