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February 2015 Archives

Cancelled debt may return as a tax bill

Anyone in Kentucky who has their credit card debt forgiven in whole or in part can expect to receive a 1099-C form from the issuer or collection agency. When this form is sent out, it is also sent to the Internal Revenue Service. In many cases, the amount of cancelled debt becomes taxable income for the card holder and could potentially result in a very large tax obligation.

Improving credit by managing credit card usage

People in Kentucky can work on improving their credit simply by managing credit card debt, making payments on time and proactively checking their accounts every day. After time passes, they can see their credit scores improve as a result.

The effect of Chapter 7 bankruptcy on a business

Some Kentucky business owners who are unable to pay their debts might be able to keep their business even if they file for Chapter 7 bankruptcy protection. The determining factor in whether a business can stay in operation is the type of business entity. Owners of sole proprietorships are in some cases able to keep their businesses while partnerships, LLCs and corporations are required to liquidate their assets and close their doors permanently.

Another way of looking at credit card debt

Many people in Kentucky carry high levels of credit card and other types of consumer debt. Some tend to use credit cards in order to purchase things they cannot otherwise afford. It is important for people to try to address their credit card debt, as significant debt levels can cause many financial problems.

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