Debt Settlement or Negotiation

Understanding Your Alternatives to Bankruptcy

People who are having trouble keeping up with their bills have a number of options available to seek relief. Not all of them know, however, how the entire process works with each of those options. Before you decide on a course of action, be sure that you talk to an experienced Ocean County debt settlement attorney who will give you honest advice about all your options.

At the law offices of William H. Oliver, Jr. & Associates, we provide complete bankruptcy services to businesses and individuals throughout New Jersey. It is our commitment to help you find the best possible debt relief solution, regardless of whether that solution is filing for bankruptcy or not. But we feel that it is important for you to understand the potential impact of pursuing debt negotiation or credit settlement rather than bankruptcy.

Debt Negotiation and Settlement

Many creditors are willing to negotiate a payoff amount that is less than the balance actually owed to them. Along with negotiating a lower payoff, it is also possible to negotiate more favorable terms and interest rates. The amount of the debt that is forgiven, however, does not go away for free.

Under the Internal Revenue Code (IRC), those funds are considered income, typically referred to as cancellation of debt income or discharge of indebtedness income. At the end of the year, you will receive a 1099(c) form showing income for the difference between what you paid and what you owed.

When You File for Bankruptcy

The IRC provides an exception to the taxability of cancellation of debt income if you were insolvent at the time the debt was canceled or if the debt was canceled as part of a bankruptcy. What this means for you is that if you file for bankruptcy rather than negotiating and settling the debt, you will have no further responsibility for the debt after discharge and will suffer no additional tax consequences.

Free Consultation With a Neptune Debt Negotiation Attorney

With offices in Toms River and Neptune, New Jersey, our lawyer is ready to help you find a debt relief solution that fits your unique needs. Evening and Saturday appointments are available. Call toll free: 1-866-974-1136 or fill out our contact form. Hablamos español.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.