When you settle debts through a debt negotiation program, will you get a 1099 for what you save? You will not get a 1099 if you can demonstrate that you are financially insolvent. IRS Publication 908 states that you must owe more than you have in assets at the time of the debt settlement agreement with your creditor. You would only pay tax on the amount of solvency you have. If you save $5000 on a debt settlement agreement and have $1500 in assets, you would pay tax on $1500. Speak with a tax adviser or tax professional to see how this would apply to you before registering into a debt settlement program.

Do I have to pay income tax if I am in a debt negotiation program? Continue Reading »

Does paying off collections help my fico score? Having open collection accounts can do major damage to your credit score. Just one collection account can drop your credit score over 100 points. This can be the difference between buying a home or not buying a home. Having bad credit will limit the types of credit that you can get as well as the interest rates that you will get. As you can image, having unpaid collections on your credit report can put you in a higher credit risk category. This would most likely cause you to get higher interest rates when you apply for credit. Continue Reading »

Should I refi to pay off my debt? Being in a financial jam can be a frustrating as well as an unsettling experience. Getting harassed by bill collectors and creditors day and night can be annoying as well as emotionally draining. But you do have options that you can take to take care of the situation. The two that we are going to discuss in the article are refinancing your home to pay off the debt or doing a debt settlement program. Continue Reading »