I heard an advertisement on the radio the other day for a debt settlement company. The voice stated something to the effect of: We know you don’t want to file bankruptcy…and the company proposed the public to consider their debt settlement plan.
- Criminal Defense Under investigation? Been arrested? Keep your mouth shut!
- Criminal Defense
- Assault Family Violence
- Assault By Choking/Impeding Breath
- Domestic Violence
- Aggravated Assault
- Sex Offenses
- Bond Reduction
- Grand Jury Meeting
- Avoiding an Indictment
- Improper Relationship With a Student
- Theft Crimes
- Theft Over $2,500
- Engaged in Organized Crime
- Probation Violation
- Evading Arrest
What the advertisement did not mention is the fact that in the IRS’ Internal Revenue Code there is a statute that states that forgiveness of debt is includible in your Gross Income. In English, that means there is a law that says if you settle with your creditors, you are taxed on the portion of the debt that is forgiven!
That means that even if you do a debt settlement plan, you may well be forced to later file bankruptcy due to IRS debt.
Debt settlement or debt consolidation companies are rarely the best solution.