Question:
Dear Steve,
Just settled with National Collegiate Thrust and Teri Loans. Got a charged off statement document, does this count as income? What did this mean???
Horse
Answer:
Dear Horse,
The forgiven debt is treated as income and you should receive an IRS Form 1099-C.
If you are not insolvent you may owe income tax on the forgiven debt. You should learn more about IRS Form 982 to avoid paying tax on the amount of forgiveness that exceeds your assets.
I’m happy to hear your loans have been resolved but the National Collegiate Student Loan Trust loans are such a mess that having an attorney validate them for you first can eliminate the loans in full and tax-free.
There is also evidence that the loans guaranteed by TERI are able to be eliminated in bankruptcy tax-free as well.
You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.
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