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Is it possible anyway to opt for settlement and avoid paying tax due to the less amount?

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Is it possible anyway to opt for settlement and avoid paying tax due to the less amount?

If your debt problem is too overwhelming, you can consider settlement. But that doesn't mean you don't have to pay the tax. You have to pay taxes because the amount of debt you didn't pay will be reported to the IRS. In a settlement, you are actually paying a reduced amount to pay off our debts. Thus, you have to pay a tax on the amount you save. You may have to pay 10%-39% based on your taxable income.

Sub: #1 posted on Wed, 05/23/2018 - 05:27

sanderspatricia29 sanderspatricia29

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It is possible under the 2 circumstances:
  1. You're financially insolvent

  2. Your total savings is less than $600. Are you fine with that? There is no point in settling debt if you can't save more than $600. Isn't it? Think carefully.

Sub: #2 posted on Wed, 05/23/2018 - 21:58

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When you settle a debt more than $600, you would have to pay a tax. It is because the amount forgiven is considered to be your income and the creditor's loss. So, as per IRS, the forgiven amount is taxable.
If you want to avoid it, then consider other debt relief options if you're able to repay the debts in full.
If required, talk to an experienced person, discuss about the pros and cons, and then make the best decision.

Sub: #3 posted on Thu, 05/24/2018 - 04:39

Good Nelly Good Nelly
Industry Expert
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Yes, you can easily repay your debt in very less time. But, it only depends upon the type of company you are relying upon because they play a major role in such issues. You should be fully known to the company’s ratings, you should be well aware if the company matches you with a state attorney. All such is my experience. Golden Financial Services is such a reliable company that really gave me the best solution for my easy and fast payment for consolidating debt in a very less time.

Sub: #4 posted on Thu, 05/24/2018 - 23:02

Eric Mcmullen Eric Mcmullen

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If you want to avoid tax, you can try to repay the debts in full. if you have credit card debt, talk to the issuer for an alternative payment plan. You can also opt for balance transfer method to repay the debts fast at a lower rate of interest.
This way, you can avoid settlement and paying tax and also pay back debt in full. It will also be good for your credit report.

Sub: #5 posted on Fri, 05/25/2018 - 05:00

Mabelle Page Mabelle Page

(Posts: 186 | Credits: )

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