Due to layoff, I was unable to pay my debts, so we quit paying everything and saved our money to start negotiating debt settlements…which we have now accomplished, but only through cashing out our entire retirement and all other savings we had accumulated. we have settled about 300,000 including 205K in equityline debt, but am currently still settling on loan modification on mortgage. I now have full time job, and will need to start re-investing back into retirement savings, but am worried about the amount I’ll have to fork out for taxes at this point.
Does anyone know if the tax ramifications on this type of issue was addressed by Congress during this whole economic crisis? I know I’m not alone in this boat. I understand that there can be income amounts added to my actual due to the “forgiven” amount that we settled as well as tax issues on the funds we used for emergency to payoff the settlement amounts…are we totally screwed now?
This reader question was submitted for site members to answer.
This is your chance to be a hero and help out this person by providing your feedback and answer to the question. Post your response in the comments section below.
If you have a credit or debt question you’d like to ask just use the online form.