How Oregonians Can Find Debt Relief

how-oregonians-can-find-debt-reliefIf you live in Oregon, I've got some good news on how you can find debt relief!

If you are fighting each month to just barely get by, you are not alone.  Statistics abound about how the average family has several credit cards and several thousands of dollars of debt.

What can you do about it?

Face the problem, honestly!

When is the last time you sat down and completed and honest, up-to-date HOUSEHOLD BUDGET?

If you are having a difficult time with too much credit debt, then the natural tendency is to avoid or ignore the facts, but you can't get out of debt without know exactly where you stand financially. Once you know exactly what you have coming in and exactly what you are spending your money on each month, we can devise a plan.



In a Debt Management Program, you will be making ONE PAYMENT to a Debt Management Company or what some people call a Credit Counseling Company.

This company will in turn have contacted each of your creditors to arrange a repayment plan.

Most Debt Management Programs take about 48 months to complete. 

Once you have competed the program, you will not only have saved a substantial amount of money in reduced interest and fees, but your credit report will reflect that you have $0 balances and your credit score will start to improve.

The problem with most Debt Management Programs is that depending on the amount of debt you owe and your left over or net, disposable income each month, you may not qualify.


Let's say you have $25,000 of various credit card debt.  At 2% of the $25,000 you owe on all of your cards, your minimum payment was $500.

Because the credit card industry figured out that they will make much more money in the long run if they make the minimum payment so small that that most people will take 10 -15 years or more to finally repay the debt.

And, the most tragic thing is that if and when you finally do pay all of the credit card debt, you will have paid 3 - 4 times more than you originally borrowed!

But in a Debt Management Program, you most likely will need to pay about 2.5% of the total, or in this case of $25,000 total credit card debt, $625 monthly!

But don't panic!  There's another option:

Debt Settlement

In a Debt Settlement Program, your payment or actually, your deposit to a bank insured reserve account is based on several factors:

  • The type of income you are receiving
  • The amount you have left over at the end of the month
  • Your health
  • Your retiement status

In a Debt Settlement Program, your creditors will not be receiving normal, monthly minimum payments as before.

Most people who have so much debt that they cannot keep up have fallen behind already or have had some accounts turned over to debt collectors anyway.

A professional Debt Settlement Company will negotiate a reduced balance (usually around 50% and sometimes less) with the creditor or debt collector.

Once the debt has been settled (by lump sum payment or over series of payments), the debt collector will report the debt to have been "settled-as-agreed" to each of the Credit Reporting Agencies.

For more information about Debt Settlement, click below:


FREE EBook Debt Settlement  Basics

But what if you do not qualify for Debt Management or Debt Settlement?

If that is the case, then you may need to seek BANKRUPTCY PROTECTION from your creditors.

Bankruptcy is a viable option to finally get out of debt.  Bankruptcy should be viewed as the last option (in my opinion) and not just a "get out of jail card" so to speak.

You will need to sit down with a BANKRUPTCY ATTORNEY in your area to discuss your situation and your options.

Depending on your specific financial circumstances, you will most likely be placed in a Chapter 7 or Chapter 13 bankruptcy.  The bankruptcy attorney will explain the differences.

We have been helping Oregonians become DEBT FREE for over 10 years.  Don't let fear of the unknown keep you in contast turmoil over too much debt.

You have options for debt relief, and we can help!










Tags: credit card debt, Bankruptcy, debt settlement in oregon, credit card, debt management, Best Debt Settlement Companies, chapter 7 bankruptcy, chapter 13 bankrutpcy, credit card debt relief oregon

Put a Stop to Debt Collection Calls!

Annoyed with debt collector calls? 

Here is how to Put a Stop to Debt Collection Calls

Anyone that has had financial troubles and fallen behind in there payments to creditors understands just how frustrating and annoying those calls from debt collectors can be.

Not only are they annoying, but embarrassing as well!

Who wants to hear, "Dad, some guy calling about your credit card bill!"

help-stop-debt-collector-callsDebt collectors are paid to get you to pay up.

They are (for the most part) trained professionals who will use every trick in the book to get you to pay.

Most abide by the law spelled out in the Fair Debt Collection Practices Act, but many do not.

First, it is important for you to know the basics of what a debt collector can and cannot do:

A debt collector cannot call you at all hours of the day.  They cannot call before 8:00 AM or after 9:00 PM.

They cannot call you at work if they are told by phone or in writing not to call you there!

A debt collector can call family or friends to inquire about your whereabouts, but the are prohibited from discussing your debts.

What debt collectors CAN'T do:

OK, so you want to put a STOP TO COLLECTION CALLS:

You will need to write a short, legible letter that demands that the debt collector stop calling you immediately.

Although you want to be authoritative, you don't want to be rude or use language you may regret latter.

Remember, most likely, you owe the debt and would like to SETTLE THE DEBT, one of these days.

Located in Portland, Oregon, we have been helping clients stop receiving debt collection calls for over 10 years.

To receive a copy of the letter we use, click below:

STOP Collection Calls Free Sample Letter

Once you have the letter written, you should send it by CERTIFIED MAIL with a RETURN RECEIPT.

This way, you have proof that not only did you mail the letter, but they received it.

WHAT IF Debt Collectors KEEP CALLING????

If the calls don't stop, write down the date, time and try to get name of the person calling.

You will need this later to file a complaint.

You have the right to sue a debt collector in a state or federal court.  You can contact your state's attorney general's office to file a complaint. If successful, you may be awarded up to $1,000 per violation!

To file a complaint with the Federal Trade Commission, click here.

Each state has it's own site, and/or method to file a complaint.

For example, if you live in Oregon, click here to file a complaint.

That should do it, but if you would like more information about how to Stop Debt Collectors or would like to know how a debt settlement program could help you, click below:

FREE EBook Debt Settlement  Basics

Tags: debt collection, fair debt collection practices act, federal trade commission, debt settlement, how to stop collection calls, dealing with debt collectors, debt settlement in oregon, debt relief in Portland Oregon

Basic Debt Settlement Information for Beginners

debt settlement for beginnersConfused about Debt Settlement?  Here are some easy to understand, basic information about debt settlement that will help.

If you are like thousands of others of consumers that have way to much debt, take heart!

There are several options for you to become DEBT FREE once again, including what is referred to as DEBT SETTLEMENT.

We are all living through some very financially difficult times.  Yes, there are those who say that our economy is starting to rebound, but if you are like so many people, just trying to survive has lead to a mountain of debt that may be out of control.

Most people that seek our help have not run up thousands of dollars of unsecured debt such as:

  • Credit Cards
  • Store Cards
  • Personal loans or lines of credit
  • Private student loans
  • Cash advance loans

No, most people are probably like you and are in this debt mess due to one or more of the following:

  • Major accident or illness
  • Limited fixed income of Social Security or meager Retirement Benefits
  • Disablitly
  • Divorce
  • Death of spouse of partner

So, here you are with several credit cards that have balances that demand more of a monthly payment than you can afford!

If you qualify, a DEBT MANAGEMENT PROGRAM might help.  Debt Management is the modern name for what we use to refer as CREDIT COUNSELING.

In a Debt Management Program, each of your creditors usually (not always) agree to a reduced interest rate and possibly a waiver or reduction in over-the-limit fees or late fees.

You would have one monthly payment that is made to a Debt Management Company and they in turn distribute the required amount to each creditor.

Most Debt Management Programs take about 48 months (some less and some more).

The problem with most Debt Management Programs is that the required monthly payment is just too high for all of the debt your are carrying!

For example...

If you have a total of $25,000 charged on several credit cards, the payment needed for most Debt Management Programs would be about 2.5% (or a little more) or about $625 per month!

In my office here in Portland, Oregon, I've had many people tell me, "Are you kidding?  If I had that much, I wouldn't be behind!"

So, that leaves us with Debt Settlement.

In a Debt Settlement Program, a debt counselor will go over your financial/household budget to determine where you stand.

This can be very revealing, as most people take the "head-in-the-sane" approach with so much debt.

You may find out that after being honest with yourself, you really only have about $350 per month remaining after all the essential bills are paid!


With a Debt Settlement Program, your creditors are not going to be receiving monthly payments.

Instead, you are going to be making a deposit into a FDIC bank account each month.

Yes, your accounts are going to become "late and/or delinquent", but really, there is nothing you can do about it due to your financial hardship.

Once your account is late approximately 120-180 days, the account will be most likely referred to a debt collector.

Now, the original creditor will be willing (not always, but in most cases) to accept a settlement for less that is due on the balance.

Most settlements average around 50% of the balance.  Some lower and some higher, depending on circumstances.

Once the account is SETTLED, you will receive a letter stating that this account has been "paid-as-agreed" or "settled-as-agreed".

The credit reporting agencies will be notified that this account has been settled as well.

Over time, your credit score will show improvement!

If you would like to receive a FREE BOOKLET that will explain more about DEBT SETTLEMENT, click below:


FREE EBook Debt Settlement  Basics




Tags: credit card debt, debt relief options, debt settlement, debt settlement in oregon, debt management, five credit score myths

Dirty Tricks of Debt Collectors

Here's some very helpful tips on how to stop the dirty tricks debt collectors use.

Dealing with debt collectors can be very frustrating, especially if you do not know what a debt collector can and cannot legally do!

The Federal Trade Commission acts to enforce the Fair Debt Collection Practices Act when debt collectors violate the law.

The Fair Debt Collection Practices Act - Guide for Consumers, will help you understand your rights and help you deal with debt collectors.

One of the most annoying tactics used by debt collectors is to make numerous calls.  Many debt collectors use automated dialers that seem to work around the clock! 

Even if you are on the National Do Not Call List, a debt collector can legally call you as you have had a previous business agreement.


STOP Collection Calls Free Sample Letter

In some cases, a faxed letter will work, but to be sure, writing and sending by registered mail is much more effective!

Although a debt collector can call your family, friends and in some cases a neighbor, THEY CANNOT DISCUSS YOUR DEBT.  A debt collector can only call them to see if they can find our your phone number or where you live.

A debt collector cannot call you at work if your employer doesn't allow you to receive calls at work.  Many times you can verbally demand that the debt collector stop calling your place of employment and that will do it.  If not, write a letter.

A debt collector cannot make false statements, use obscene language, make threats of violence on the phone or in writing!

Although most debt collectors act in a semi-professional manner, there are some that will try any and all dirty tricks in order to collect their commission if they get you to pay up!

One of the most used dirty tricks that a debt collector uses is sending a "legal looking letter" that seems to indicate that you are being sued!

The Fair Debt Collection Practices Act clearly prohibits a debt collector, and even debt collectors that are attorneys, from threatening to take legal action if in fact they do not intend to.

For example, a debt collector will send a letter that says something like:

"At this time, this office has not taken any legal action, but...." or...

"If you do not contact this office within 20 days from the date it was mailed, this account will be turned over to our legal department for review."

If you received (or have received) a letter like that, then you know it is scarry!

Remember, a debt collector cannot take "legal action" until they have had an attorney, licensed in your state, prepare and submit a "claim" to your county courthouse.

Then, a SUMMONS is prepared and delivered to you.

If you do not act on the summons, then they would most likely be awarded a DEFAULT JUDGMENT.

After the judgment has been awarded, they can now take legal action such as:

  • Wage Garnishment
  • Bank Levy
  • Place a lien on your home

The point is that just because a debt collector's letter sounds like they have taken legal action, doesn't necessarily mean that they have.

Finally, a debt collector usually has the ability to accept a lesser amount than the full amount that is due.  This is called a DEBT SETTLEMENT.

Debt collectors are paid to collect as much money from you as possible!  They may tell you that their client (the original creditor) will not accept a reduction of the balance or may say that they will only accept a very small reduction.

A consumer that has not had the experience of dealing with professional debt collectors can be intimidated and may pay much more than is necessary to settle the debt.

We have helped hundreds of clients settle debts at 50% or below for many years.


Don't fall for the dirty tricks of debt collectors!











Tags: debt collection, fair debt collection practices act, federal trade commission, debt settlement, debt settlement in Texas, debt settlement in oregon, debt relief in Portland Oregon, debt collector tricks

3 Easy Tips to Stop Wage Garnishment

stop wage garnishmentA wage garnishment because of unpaid bills can be devastating!

Here are 3 easy tips on how to stop wage garnishment:

If you are having a difficult time keeping up with your credit card accounts or other unsecured debt, your not alone!

Over the recent years, hundreds of thousands of people just like you have had to take on more credit in order to survive the downturn in our economy or other financial setbacks such as:

  • Loss of employment
  • Divorce
  • Illness
  • Death of a spouse
  • Disability
  • Too little income from Social Security, etc.

Once you miss a payment to one of your creditors, they will start calling and sending late notices.

You can download FREE INFORMATION ON HOW TO STOP COLLECTION CALLS by clicking on the button below:

STOP Collection Calls Free Sample Letter



The biggest mistake I see people make that can lead to a wage garnishment is to ignore the calls and/or letters.

Obviously, if you miss a payment, it is going to trigger a signal to alert the creditor.  Creditors don't necessarily want you to pay off your entire account (they make their money on interest and fees!), but they demand a monthly payment...or they get real upset!

Your account will usually be sent to an internal collections department within the company when it is about 90 days over due.  The collection departments job is to save the account...get you to start paying again.

They may offer you a HARDSHIP PLAN, but BE CAREFUL! 

Most hardship plans will offer you a small reduction in your payment and perhaps your interest rate for maybe, 6-12 months.  Sometimes, they may offer to waive the "late charges and/or over-the-limit" fees they may have tacked on to the balance. However, the problem with a hardship plan is that, while it may stop the calls, you are not really paying down the debt.

Also, once the time period of the hardship plan expires, you are right back to making the normal payments!


If a creditor cannot get you to start making payments again, they may decide to send the account to a collection agency. The calls and letters will start again as you will no longer be dealing with the original creditor anymore.

Just as you did before, you will need to send a letter to the collection agency to stop the calls.

If the collection agency cannot get you to pay, they may decide to file a complaint with your local courthouse stating that you owe the debt. The court will prepare a SUMMONS, and you will most likely get a know at the door one evening and someone (may be a police officer), will SERVE YOU THE SUMMONS.

Sounds intimidating...and it is! Yet, the worst thing you can do (and a lot of people make this mistake) is to ignore the summons!

The summons will state who you owe and how much, and it will say that you have 20-30 days (depending on your state's laws) to give an ANSWER. An answer is a legal term that you would file if you feel that you do not owe the debt.

In most states, you will have to pay a filing fee and it has to be legally correct in order to file, so you may need to hire an attorney.

Just because you received a summons does not mean that you are going to be sued, or go to jail, or have all of your belongings still have rights!

But what it DOES mean is that the creditor is SERIOUS about collecting the debt.

If you are employed, the creditor could be awarded 25% of your net take home pay until 100% of the debt is repaid with interest (9% in Oregon...each state varies a little).

Call the collection company or attorney representing the collection company and try to work out a SETTLEMENT or a repayment plan called a "stipulated agreement".

If you don't, the creditor will be awarded a judgment by default (called a default judgment), and now they can pursue legal avenues including wage garnishment!


I know, you most likely do not have a lot of money in savings, but let's say the total debt is $2,000 including interest, attorney fees and court costs, they may be will to take 70%-80% to settle the debt.

If you had contacted the creditor before the account went to collections and then the legal process, you may have been able to settle for 50% or less!

We have been helping people get out of debt for many years and would like to help you.

                                 FREE, NO OBLIGATION CONSULTATION











Tags: debt collection, wage garnishment, credit card debt, credit card hardship plans, how to prevent wage garnishment, wage garnishment in oregon, debt settlement in oregon, collector

3 Tips on How to Survive With Too Much Debt

how to survive with too much debt

According to a report issued by the United States Federal Reserve System, as of July 2012:

  • Total US credit card debt was over $793 BILLION DOLLARS!
  • The average credit card debt per household was $15,799.
  • One out of 4 stated that their personal debt had increase by 26% in the last 12 months!
  • 76% of college students have credit cards.

I read an article about Survival in the Outdoors recently.  Interestingly, many of the lessons on how to survive in an emergency can be applied to how to survive with too much debt.

Step One: Don't Panic!

Stop and take a deep breath! Do not panic.  Do not feel ashamned that you are lost or in this prdicament.  Some of the best outdoors people in the world have become lost or disoriented,  and have run around in circles!

Slow down, relax and take a good look at your situation. There is a way out of this!

The same thing applies with having too much debt.  When you finally realize that you are in real trouble with your debt, DON'T PANIC!  Take a deep breath and realize that you are not the only one!

There is a way out of this!

Step Two: Evaluate your Circumstances

When lost or in an emergency situation, the next thing you must do is take stock of your circumstances:

  • Do you have water, shelter, food, fire?
  • Does anyone know where you are?
  • What supplies or tools do you have?

Once get a really good look at your situation, you can start to take steps to get out of it!

The same thing applies with having too much debt:


This is the only way you can really know:

  • How much debt you really have?
  • What are the total of the minimum payments you have to make?
  • How much are all of the other household bills?
  • Is there any discretionary or money left over at the end of the month?

Step Three:  Make a Plan

In a survival situation, once you calm down and get a good idea of your circumstances, you can devise a plan.

Make a shelter.  You can survive without food for weeks if necessary and many days without water, but if you are caught in the cold and/or rain, you could die from hypothremia within a few hours!

In other words, you have to survive to survive!

The same holds true for getting out of debt. The most important thing you can do is to formulate a plan. Depending on your unique circumstances, you may need qualify for:


This program allows you to have:

  • One monthly payment
  • All of your creditors are being paid each month
  • Late fees and interest are reduced or eliminated
  • Creditors stop calling!

To see if you qualify, --> CLICK HERE <--

But if you don't qualify for the Debt Management Program, you may qualify for a:


This program allows you to have:

  • One monthly payment that will work with your budget
  • Your debts will be negotiated and settled for much less than the balances
  • Creditor calls can be stopped
  • Once all of your debts are settled, your credit report will improve


If neither of these programs work for you, then you may qualify for BANKRUPTCY.  Bankrupcty is a scarry word, but many times, it is the best and only solution.

There are various types of bankruptcies and you should consult a bankruptcy specialist to learn more about your bankruptcy options.

The worst thing you can do in a survival situation is to do nothing! The same thing applies to surviving with too much debt.

We can help point you in the right direction.

For a FREE Consultation, click here.






Tags: credit card debt, debt relief options, debt negotiaion, debt settlement in oregon, debt management, debt management vs debt settlement

What To Do If You Receive a 1099-C

what to do if you receive a 1099-C

Have you had a debt settled for less than you owe?  If so, chances are pretty good that you also received a 1099-C for the amount of the "forgiven" debt amount.  WHAT?  How can that be possible? 

Unfortunately, if you settle your debts, the forgiven amount is considered taxable income.  However, you don't necessarily have to included it as taxable income.  Read on to hear Bob's story and how he was able to avoid paying taxes on his forgiven debt.

How to avoid paying taxes if you receive a 1099-C for FORGIVEN DEBT

Bob lost his job and started using several credit cards to make ends meet. He was paying for groceries, gas, and even had to take a cash advance once in a while to survive.Bob had every intention of paying off the cards, but due to our country's severe economic downturn, he could not find a job.

After about a year or so, he had added another $10,000 to his cards, making the total of all his credit cards to be about $22,000!The minimum payments on all of them totaled a little over $500 per month and he just couldn't meet his obligation.  After 3-4 months of non payment, most of his cards went into collections, debt collectors started

Bob had heard about DEBT SETTLEMENT and DEBT MANAGEMENT, but didn't know if he qualified.

After a FREE COUNSULING SESSION, it was clear that he could not qualify for the Debt Management Program and therefore chose to enroll in the Debt Settlement Program.

Let's see what happened during the Debt Settlement Program:

After searching the net and talking with several companies, Bob had chosen a reputable Debt Settlement Company to help him settle his debts.

His total debt was settled at an average of 40% of what he owed, so his creditors FORGAVE about $13,000 of debt.

Because the amount of the forgiven debt was over $600, Bob's creditor reported the settlement to the IRS and mailed him a 1099-C.  The 1099-C basically said that $13,000 had been forgiven and he needed to report that amount as additional income for the taxt year the forgiveness was granted.

But his Debt Settlement Company helped him understand that he was not going to be liable for the additional income and resulting tax on that income.

They provided him with a information about how to file IRS Form 982 and the other documents he needed to provide with his taxes.

IRS Form 4681, says that if, at the time of forgiveness, you were INSOLVENT (meaning your liabilities were greater than your assets), then the forgiven amount DID NOT HAVE TO BE INCLUDED as additional income!

Since Bob had completed an Asset vs. Liabilities worksheet, provided by his Debt Settlement Company, he was able to completely avoid any additional tax on the settlement or "forgiven" debt shown on the 1099-C!

If you have received a 1099-C and need help, we can help, please let us know!


Tags: debt collection, credit card debt, debt settlement, debt settlement vs bankruptcy, debt settlement in oregon, 1099-C, IRS Form 982, IRS Form 4681, debt management, additional taxes, IRS 4681

Debt Management vs. Debt Settlement: Weighing the Options

debt management vs debt settlementDEBT MANAGEMENT vs. DEBT SETTLEMENT - What's the Difference?

It's important to know that one program does not solve all problems.

If you are making the minimum monthly credit card payments, Debt Management program may be right for you.

Debt Management (also known as Credit Counseling) allows you to consolidate all of your unsecured debt into one low monthly payment and offers the following benefits:

  • Pay less. Creditors will offer a plan to repay your debt at a reduced interest rate and in some cases, a lower payment.  Also, most creditors will wave late and over the limit fees AND bring your accounts back to current without making up those missed payments. This alone could save you thousands over the life of the debt!
  • Pay off your debt faster. If you continue to just make the minimum payments, it could take you 20-25 years to pay off that credit card! In a Debt Management Program, you should be able to pay off your debt in three to five years, saving you thousands of dollars!
  • Reduce your stress. Calls from you creditors STOP and you will have an end in sight.
  • One, easy payment each month. You will have one monthly payment so you don’t have to juggle payments.

But, if you cannot afford the payment required by a Debt Management Program, Debt Settlement may be the answer.

Debt Settlement is a program designed for people:

  • Who are delinquent or are starting to become delinquent on their payments
  • Some or all of their debts have gone into collections or are about to be turned over to a debt collector.
  • DO NOT want to file for bankruptcy

In a Debt Settlement Program, most people:

  • Have a substantial reduction in their monthly payment
  • Save thousands of dollars in both principal and interest
  • Are DEBT FREE in 36-48 months


  • Credit Cards
  • Lines of Credit
  • Medical Bills
  • Unsecured Loans
  • Collections
  • Repossessions

If you would like to learn more or if you have questions about these two options, our Debt Solutions Specialists are here to help.  Please give us a call at 1-877-492-4109 or simply click on the link below for a FREE COMPARISON of both programs based on your total debt!

Tags: debt collectors, debt settlement in oregon, debt management, debt management vs debt settlement

How to Stop Abusive Debt Collection Practices

stop collector abuseYou do not have to put up with abusive debt collection practices.

Debt collectors must abide by the laws spelled out in the Fair Debt Collection Practices Act (FDCPA) or could face severe fines!

The  Federal Trade Commission (FTC)  is the nation's consumer protection agency and has published guidelines for consumers that explains what a debt collector can and cannot do.

Here are just some of the most abusive debt collection practices and violations:

Calling you many, many times a day at all hours of the day!

A debt collector may not call you before 8am (local time) or after 9pm (local time), unless you have agreed to it.

The best thing you can do to put a STOP TO DEBT COLLECTORS CALLS, is to send them a letter that demands that they stop calling you both at home and (if employed), your employer!

It is a good idea to send the letter via certified mail so you have proof that they received it.

You should also keep a copy of the letter.

The debt collector may only contact you once more to tell you they received the demand letter.

If they continue to call, you should report them to your state attorney general's office by going on line to file a complaint.

You should keep a log of all calls, time of day, etc.

A debt collector cannot discuss your debt with neighbors, family or friends without your consent!

A debt collector can only contact others to find your address, phone number or where you work.


  • Debt collectors are prohibited from:
  • using obscene or profane language
  • making many, many annoying calls (many times via computer dialer)
  • using threats of violence
  • making false statements, such as threatening a legal action if they do not follow through
  • falsely claim to be a government agency
  • threaten to seize, garnish or sell your property to pay the debt (unless they have been awarded a legal right through the courts)

 What can you do if a debt collector has been awarded a judgment against you?

You may want to get advice from an attorney (yes, expensive), but it is VERY IMPORTANT that you don't ignore a summons, notice of levy or garnishment.

Once a debt collector has been awarded a judgment, they can apply for a writ of garnishment and also for a levy of your bank accounts.

The best thing you can do is to contact the debt collector immediately after receiving a letter and do you best to settle the debt.

Debt Relief NW can help you:

  • Stop collection calls
  • Negotiate debts for 50% or less in many situation
  • avoid garnishments and bank levies
  • avoid bankruptcy



stop colletor abuse




Tags: debt collection, fdcpa, debt collection harassment, debt settlement in oregon, garnishment

I Received a 1099-C, Now What?

received a 1099CIf you have received a 1099-C, DON'T PAY THE ADDITIONAL TAX until you know your rights!

If you or a debt settlement company negotiated a debt for less than the balance due and if that amount was more than $600, you most likely will receive a 1099-C.


The 1099-C looks like you will have to pay 100% of the settled or forgiven amount, but this is simply NOT TRUE!

However, a lot of tax preparers and even CPA's don't understand this law and how exemptions are calculated.

According to IRS Form 4681, there are several exemptions to including forgiven amounts back into taxable income. On page 4 of IRS Form 4681, there is an explanation of "INSOLVENCY". 

Basically the rule states:

If at the time of the settlement or forgiveness you were INSOLVENT, then the amount of the forgiveness IS NOT INCLUDED as additional taxable income.

How do you determine if you were insolvent?

At the time of the settlement, you need to show that your liabilities were only equal to or greater than your assets.

You need to complete a basic budget showing all of your income, outgo, and assets:

  • Equity in your home
  • Net value of your automobile(s), boat, etc.
  • Net value of jewelery, stocks, bonds, etc.
  • Savings or investment accounts
  • Net furniture value, coin collections, etc.

For most people who have negotiated a settlement of their credit card or cards, they usually do not have any real assets and therefore the amount forgiven is not included as additional taxable income.

You will need to complete IRS Form 982. You will check a couple of boxes and sign, and along with the Budget Worksheet, turn in with the 1099-C and your normal tax return.

Once again, don't be surprised if your tax preparer or accountant is not really up on this procedure! You might want to download IRS 4681 for them to review.

If you have already filed your taxes for the last two years and if you paid additional tax on the additional income added back into your adjusted gross income, you should file an AMENDED RETURN.

If you are still unsure of what or how to deal with a 1099-C, please let us help.

We have helped dozens of tax preparers and accountants deal with the 1099-C issue and would be glad to assist.

Got Questions? We've got ANSWERS!


received a 1099C


Tags: debt forgiveness, debt settlement in oregon, 1099-C, IRS Form 982, IRS Form 4681