Forgiven debt may be taxable by the IRS!
The Second Circuit has ruled that debt collectors don’t need to warn clients of the potential tax liabilities associated when making a settlement offer for less than the full amount owed.
In Isaac Altman v. J.C. Christensen & Associates Inc., docket number 14-2240, the U.S. Court of Appeals for the Second Circuit stated in it’s opinion that the “fact that a debtor may then have to pay tax on the amount saved is simply not deceptive…”
Isaac Altman received a letter from J.C. Christensen & Associates stating that he could save up to 50 percent on his $6,000 debt if he made a payment upfront. Altman alleged the letter was deceptive violated the FDCPA’s prohibition against false, deceptive, or misleading representations. As stated above, the Court was not convinced.
So, you may want to consult your accountant/tax preparer before accepting a debt settlement offer. Additionally, you generally won’t have this tax issue if you file for chapter 7 bankruptcy. Therefore, it may be in your best interest to also consult a bankruptcy attorney.
The Law Firm of Vaughn & Weber, PLLC
393 Jericho Tpke. #208
Mineola, NY 11501
(516)-858-260
Foreclosures are Increasing
Foreclosures are increasing.
According to several recent news articles and reports, it appears that foreclosure actions are once again on the rise. Fortunately, we have noticed much of an increase in foreclosure actions being brought. At any rate, this is still troubling news.
Loan Modifications are up.
At least in our office, we have seen an increase in Loan Modifications. Many of our clients have recently received loan modification offers. Many of the offers are for a HAMP trial modification. However, we have received some permanent in-house modification offers.
Each case varies:
- Some cases involved lengthy litigation (years).
- Some cases were resolved in a matter of months.
- Several of our clients had already filed for chapter 7 bankruptcy
- Most, if not all, of our clients were previously turned down for a loan modification.
Note: Prior results do not guarantee a similar outcome.
The Law Firm of Vaughn, Weber & Prakope, PLLC routinely represents homeowners facing foreclosure. We examine each homeowner’s specific situation to determine their best course of action. We proudly assist residents of Long Island (Nassau county, Suffolk county) and New York City (Queens, Brooklyn, Bronx, Staten Island, and Manhattan) with their foreclosure matters.
Call (516) 858-2620 to arrange a FREE consultation with a foreclosure attorney!
How long will my chapter 7 bankruptcy case take to close?
Well, most of our chapter 7 bankruptcy cases take roughly 3 months from case filing until discharge/case closure (Note: Discharge and case closure are not the same thing).
Additionally, when your attorney files his or her chapter 7 bankruptcy cases could add to the length of time you are waiting for your bankruptcy case to close. Some attorneys “batch file” their chapter 7 cases. They hold their chapter 7 cases and file them together on a particular day (i.e. the end of the month). We file our bankruptcy cases as they are ready to be filed. As always, we hope that you found this information helpful.
The Law Firm of Vaughn & Weber, PLLC, proudly assists residents of Long Island (Nassau county, Suffolk county) and New York City (Queens, Brooklyn and Staten Island) with their bankruptcy filings. Call (516) 858-2620 to arrange a FREE consultation with a bankruptcy attorney!
Debt Settlement vs. Bankruptcy
Debt Settlement Better Than Bankruptcy?
Rarely.
There are some situations which prohibit a person from filing bankruptcy and debt settlement is really their only option to get rid of their debt. Sometimes, the amount of debt or creditors are few and it just makes more sense for the individual to settle their debts rather than file bankruptcy. However, debt settlement is rarely going to be better than filing a chapter 7 bankruptcy and obtaining a discharge of your debts. Therefore, it is important to obtain accurate information about bankruptcy and debt settlement. Both options should be thoroughly explored.
Bankruptcy Attorney in Mineola
The Law Firm of Vaughn, Weber & Prakope, PLLC, proudly assists residents of Long Island (Nassau county, Suffolk county) and New York City (Queens, Brooklyn, Bronx, Staten Island, Manhattan) with their bankruptcy filings and debt negotiation/settlement.
Call (516) 858-2620 to arrange a FREE consultation with a bankruptcy attorney!
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