2007-01-31 23:41:33 · 3 answers · asked by Anonymous in Business & Finance ➔ Credit
Debt forgiveness is where the creditor tells the debtor, legally and in writing, that the debt is forgiven and need not be repaid.
Debtors who are given such good news are usually overjoyed, at least until they learn (some of them, not all of them) that forgiveness of debt by the creditor can often give rise to taxable income to the erstwhile debtor.
Not so fast, Captain Yossarian, Major Major Major Major, Milo Minderbinder, and Lieutenant Scheisskopf!
2007-01-31 23:56:54 · answer #1 · answered by Anonymous · 2⤊ 0⤋
Lets say you have 10,000 in credit card debt and you file bankruptcy, the credit card company "Forgives" your debt. They may then issue you a 1099-C form for the cancellation of your debt which is then reported on your Income Taxes for the year as income. You can thank the Republicans and the banks for that one. Just one more reason I will never vote Republican.
2007-01-31 23:46:52 · answer #2 · answered by mrfoxhorn 5 · 0⤊ 0⤋
You dont have to pay your loan anymore.
2007-01-31 23:46:31 · answer #3 · answered by steph k 2 · 0⤊ 0⤋