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Are there tax consequences of a successful settlement?

consequences successful tax
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Are there tax consequences of a successful settlement?

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Sometimes a creditor will send a 1099C statement for the amount they have written off when settled. The government calls this forgiveness of debt income. It may be possible to use the exception in the tax law; if insolvent you do not have to pay tax on it. We suggest that you check with an accountant to see if you qualify for this exception.

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