Is Debt Forgiveness in NYC Viable
If you are behind on your debts you may have heard of banks and credit card companies ‘forgiving’ the debts so you don’t have to pay it. While this is rare, it is an option that lenders have available to them in NYC, Brooklyn, Staten Island, Bronx, and Queens. Learning about what debt forgiveness is, and whether it is a good option to look into, is an important place to start. As many things that sound to good to be true, debt forgiveness isn’t as straight forward as you might hope.
Will Debt Forgiveness Eliminate Debts
When talking with a creditor, and they say that they can forgive the debt that you owe them it will likely sound like a great option. If you owe them $10,000, for example, and they forgive the debt, you now owe them nothing. The problem with this situation, however, will appear the following January. You will receive a 1099-C form from the creditor saying that you received $10,000 from the company, and you now have to pay taxes on it.
That’s right, debt forgiveness is seen as a gift, and one that can end up costing you a lot of money. The exact amount you will have to pay in taxes can vary greatly based on your situation, but it can end up being hundreds or even thousands of dollars. Of course, this would be better than having to try to pay off the entire $10,000 that you owe, it still isn’t the ideal option for most people.
Consider Chapter 7 Bankruptcy in NYC
Rather than going through the hassle of debt forgiveness, why not consider seeking Chapter 7 Bankruptcy. This is an option that is almost certainly available to anyone who would qualify for debt forgiveness, and comes with several significant advantages. First, there aren’t any taxes owed on the debts that are eliminated through the bankruptcy. This can save you a lot of money in the future.
Another advantage of bankruptcy over debt forgiveness is that it will cover all of your debts. If you want to qualify for debt forgiveness, you need to work with each individual creditor and try to negotiate a deal with them all. With bankruptcy, on the other hand, you just go through the court process and all your debts are addressed by the courts. In most cases, you’ll be able to keep your home, vehicles, and other desirable items. The debts that you owe are still eliminated, which can position you well for your financial future.
Help with Chapter 7 Bankruptcy
If you think that Chapter 7 Bankruptcy might be a good option for you, please give us a call to discuss your option and see if you will qualify. We work with people from throughout NYC, Brooklyn, Queens, Bronx, and Staten Island so please give us a call at 1-718-646-5783 to go over all your options and see what the next steps should be. Thank you for considering Gursoy Law Firm, we look forward to hearing from you soon.