Settlement Debts OR Bankruptcy?

I just accepted an offer to settle a credit card debt, at the end of the disclaimer, they slipped in that the IRS would be sending a letter because the portion not paid due is now taxable. And at first, I was understanding that on my credit report it would say %26#039;account settled for a lesser amount,%26#039; that this was not to be a negative mark, but I was told that it will in fact leave a negative mark. So my question is should I consider filing bankruptcy instead of taking the option for settlement, then get taxed on the remaining amount from IRS?

Settlement Debts OR Bankruptcy?child tax credit

Honestly...it does not really benefit you to pay debt that is already listed as negative on your credit report. Although the debt is old, you are still legally responsible for it. Ch. 7 bankruptcy may be an option for you as it will erase the negative charged off debt and help with you debt to income ratio. Despite what some of the responders may say, you can recover from bankruptcy. It is possible and easy to reestablish and obtain credit after bankruptcy. Hoped this helped.

Settlement Debts OR Bankruptcy? loan

If you file chapter 7 you will not be billed by the IRS on credit card debt. They will bill you if you have borrowed a second mortgage and then defaulted. A bankruptcy won%26#039;t be much worse on your credit than a settlement.|||i don%26#039;t know about the bankruptcy part. as for the settlement, if the settlement is greater than $600 (i think), than you%26#039;ll get a 1099. you%26#039;ll need to report that as income to the irs. depending on your tax situation %26amp; deductions, it may be to your benefit.

from personal experience, i received 1099 totaling $7000; however, because of my tax situation %26amp; itemized deductions, it only cost me $500--meaning my refund was reduced by $500.

good luck