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Need your advice on $ problems
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<blockquote data-quote="KTMom91" data-source="post: 159850" data-attributes="member: 4040"><p>We're in a similar position...ended up living on credit cards when Hubby was laid off, and before I went back to work. We have defaulted on some of the cards, and have settled some, and are still in progress on settling others. Regarding the car...at some point the repairs will cost you more than a new one will. You just need to determine if you're at that point yet. </p><p></p><p>Another thing to consider, which few people know about...when you settle a credit card debt for a lower amount, that amount is considered taxable income. You will get a 1099-MISC and you will be required to pay taxes on the amount that was forgiven. If you don't include it, the Underreporter Department at the IRS, who really do go through tax returns and income info, and match them up, will send you a bill in about three years, which will include penalties and interest back to the original filing date. If that's happened already, and you didn't include it, you can call the IRS and request transcripts of your income info for the past ten years. You'll already have the tax bite on the money from Gma, plus the potential bite from settling with credit companies. Anyway, just something else to think about.</p></blockquote><p></p>
[QUOTE="KTMom91, post: 159850, member: 4040"] We're in a similar position...ended up living on credit cards when Hubby was laid off, and before I went back to work. We have defaulted on some of the cards, and have settled some, and are still in progress on settling others. Regarding the car...at some point the repairs will cost you more than a new one will. You just need to determine if you're at that point yet. Another thing to consider, which few people know about...when you settle a credit card debt for a lower amount, that amount is considered taxable income. You will get a 1099-MISC and you will be required to pay taxes on the amount that was forgiven. If you don't include it, the Underreporter Department at the IRS, who really do go through tax returns and income info, and match them up, will send you a bill in about three years, which will include penalties and interest back to the original filing date. If that's happened already, and you didn't include it, you can call the IRS and request transcripts of your income info for the past ten years. You'll already have the tax bite on the money from Gma, plus the potential bite from settling with credit companies. Anyway, just something else to think about. [/QUOTE]
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