Awfully
Crazy In,#2Consumer Comment
Mon, September 08, 2008
I took this information from site: http://www.querycat.com/faq/3035bacb5ecbb64cbee936baf39ee956 It states: Debt settlement may have tax consequences, but usually will not. A creditor can give you a 1099 for amounts of debt forgiven, but the IRS takes the position that this is not taxable income if the debtor is insolvent at the time of the settlement. This basically means that you had more debt than assets. If you are not insolvent, this may not be a good program for you because you could have a tax liability. Please consult a tax advisor regarding this issue. If your creditor settles your debt for more than $600 less than what you owed, the savings may be reported by your creditor to the IRS as Discharge of Indebtedness Income. You understand that Progressive Debt Relief assusmes that you enrolled in its Debt Settlement Plan because you are insolvent, having financial difficulties with your unsecured debts, and/or have used a Debt Settlement Plan to avoid filing for bankruptcy.
Awfully
Crazy In,#3Consumer Comment
Mon, September 08, 2008
They did not report you extra income as fraud. It was your extra income. If they had made you pay your bill in full you wouldn't have had that extra $976.00. You would have paid it to them. Therefore, it was extra income for you, therefore, taxable. Every creditor that settles any account has to report it on their taxes, therefore, the IRS expects you to report it as income on yours since you didn't have to spend it. It is required by law. This is not a legit rip off. You did this to yourself.