Friday
Jun052009
Debt That Is Forgiven By Creditors Is Considered Income
Friday, June 5, 2009 at 8:47AM MAD21 By Alan and Brian, CPA
I had someone make a statement at work that I wanted to look into. Since it was a money related, I asked Brian who is a CPA. I wanted to know: If you have a $10,000 debt to a credit card company, and through negotiation (because you can't pay the full amount), they relieve $5,000 of debt in order for you to only pay $5,000, is it true that the credit card company will issue a 1099 to the IRS in the form of income given to you? Are there times when this would not happen? This seems like this isn't really talked about, if true.