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When grasping government fingers makes debt relief hard to get

Overcoming obstacles can be fun if it's being done as part of a game. Knowing that the game is going to be over at some point makes it easier to face the hurdles. And even if you get tired of it -- it's a game. You can just opt to stop.

Life is not that simple. If you happen to be struggling with a lot of issues that leave you swamped with financial debt and sorely in need of debt relief, there may be some options you can exercise to obtain respite. Aid might come through debt consolidation or debt discharge through bankruptcy, for example.

But what if you are confronted with what amounts to a perfect storm of financial difficulty? That is just what one man we know only as Frank is dealing with now. 


It all began around 2009. First, the 66-year-old Frank lost his job. Two months after that, his wife died. Then he was diagnosed with kidney cancer and other serious health problems.

Out of work in the midst of the recession, Frank struggled with bills and medical debt for two years. Going through bankruptcy cleared a lot of his obligations, but not about $150,000 student loan debt he had accrued helping three children with college.

Frank saw that debt erased last July through a disability discharge. But in January, the Internal Revenue Service informed him that the forgiven student loan money counts as income and he owes $59,000 in taxes. Not surprisingly, Frank's reaction was, "Now I am somewhat panicked."

Sadly, according to consumer advocates and tax specialists, this government shell game is not unusual, making the assistance of an attorney well advised.

That is what Frank reportedly has obtained. He hasn't cleared all the hurdles yet, but he says he's working to get his tax burden lowered to a somewhat more manageable amount.  

Source: The New York Times, "Disabled Borrowers Trade Loan Debt for a Tax Bill From the I.R.S.," Tara Siegel Bernard, March 27, 2014

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