jewel1980 Posted August 9, 2003 Report Share Posted August 9, 2003 hi all,I found this article on bankrate.com hope it helps, I found it interesting since I may be facing debt negiotiationhttp://www.bankrate.com/brm/itax/news/20030303a1.asp?prodtype=cclet me know if have any opinions on the matterjewel Link to comment Share on other sites More sharing options...
kb9tbq Posted August 9, 2003 Report Share Posted August 9, 2003 Not every debt settlement, however, has to lead to a higher tax bill. You don't have to report debt forgiven as income if:You contest the liability. If your debt settlement is achieved because you protest an owed amount, the forgiven debt is excluded from the DOI rule. Some people encounter this situation when they dispute credit card charges. For example, MasterCard contends you owe $1,000 but you didn't buy those Ferragamo shoes. The debate rages on for weeks. Finally, to put an end to the quibbling, you offer to pay $200 and MasterCard says OK. That $800 difference is a settlement of contested liability, and you're not liable for taxes on it. You are in bankruptcy proceedings. When you're paying a portion of what you owe because you've declared bankruptcy, the IRS does not consider the difference between those amounts discharge of indebtedness income.You are insolvent. This means your liabilities exceed your assets. Forgiven debt in these cases is not taxable. That is very interesting, did not realize that there where exceptions to this, so I pulled it out for others to see.Thanks, Link to comment Share on other sites More sharing options...
jewel1980 Posted August 10, 2003 Author Report Share Posted August 10, 2003 if in fact I can get the documentation together to prove that these loans are not 100% student loans and that they are just regular personal installement loans used for educational purposes, that means that the SOL applies to them, and since they are with a CA at the moment yet not reporting them, OC WFB still reporting them, and CA is working for them and I can settle for like 30% or lower of the principal in exchange for completer deletion by WFB or a totally postive tradeline from WFB then we will talk, and the rest of the debt be forgiven w/o the threat of extra income with a 1099 form due to insolvency b/c my debt definitely exceed my assets, so that is why I am going to talk to the attorney as soon as school starts backthanksjewel Link to comment Share on other sites More sharing options...
admin Posted August 10, 2003 Report Share Posted August 10, 2003 bump Link to comment Share on other sites More sharing options...
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