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Posts tagged "income"

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.

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.

Understanding the 1099-C cancellation of debt form

Kentucky residents who have unsecured debt like medical bills or maxed out credit cards may want to learn about the 1099-C form. The 1099-C 'cancellation of debt" form is an IRS document that is sent to individuals after some types of debts are either canceled or forgiven. Although former debtors may think they owe nothing once a debt is resolved, they might owe something to the IRS during tax season.

Avoiding wage garnishment in Kentucky

Wage garnishments occur when a person does not keep up with regular payments on outstanding debt. The best way to prevent creditors from garnishing wages is to speak with them to create payment arrangements. In most cases, making regular payments according to an agreement with the creditor can stop an existing wage garnishment or prevent garnishments in the future.

Getting credit again after bankruptcy

Kentucky residents who are struggling with debt often wonder how filing for bankruptcy will affect their credit and use of credit cards in the future. The fact is that it is possible to get credit again after filing bankruptcy, but the terms will be drastically different from what people with excellent credit enjoy. However, investing in the right credit cards can help consumers rebuild a positive credit history and eventually restore their good credit rating.

Delinquent debt plagues over a 3rd of Americans

Kentucky residents who are struggling to pay their debts may take comfort in the realization that they are not alone. A recent study by the Urban Institute analyzed credit information for approximately 7 million Americans and discovered that more than one-third of them have had debts placed in collections. Typically, a debt is moved to collections and its account closed if it is more than 180 days past the due date. At that point, the debt will usually affect the person's credit report negatively.

Potential side effects of relying on credit cards

Kentucky residents may be aware of the upfront costs of using credit cards, including interest rates and annual fees. However, there are other side effects to relying on credit to make purchases that tend not to be discussed in the pages of disclaimers that are handed out when a person completes an application and accepts that shiny, new card.

Using credit cards after bankruptcy

Many Kentucky residents wonder if they can continue to use a credit card after they file for bankruptcy. In the case of a Chapter 7 bankruptcy, there are no restrictions so it is entirely possible to use a new card immediately upon receipt. In the case of a Chapter 13 bankruptcy, any new credit must be approved by the trustee overseeing the bankruptcy case. It may be possible to get new credit after that approval.

When debt is larger than income

Kentucky residents who are burdened with overwhelming financial obligations may wonder how much debt is too much. One benchmark that is often cited is having more in debt than one makes in annual salary. Some advisers say that level of debt signals a problem. Others believe that it depends on the types of obligations. While that amount of student loans could be acceptable, the same level of credit card debt is likely not.

Unpaid debts can lead to wage garnishments

Kentucky residents may be interested in what can happen to them if they fail to pay their debts. While there are numerous actions a creditor can take to collect an unpaid debt, one of the most serious is wage garnishment. When a creditor has been unable to collect via traditional means, they can go to court and get an order for a wage garnishment, which allows the creditor to take a portion of an employee's paycheck until the debt has been paid. Federal consumer credit regulations limit the amount that can be taken in most instances. Employers are required to go along with any wage garnishment order. While consumer creditors are required to go to court to obtain a garnishment order, government obligations are not subject to prior court approval.

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