Q&A: Part payment of a debt will not be adequate consideration to discharge a debt?

Question by ·æ Î: Part payment of a debt will not be sufficient consideration to discharge a debt?
discuss

Best answer:

Answer by thylawyer
Not without the prior agreement of the creditor. Or as part of a Chapter 13 bankruptcy in the US.

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Q&A: What income threshold would you have to meet in order to discharge all your debt, in a bankruptcy filing in NY?

Question by Tongo44: What income threshold would you have to meet in order to discharge all your debt, in a bankruptcy filing in NY?
Bankruptcy

Best answer:

Answer by rpg
Superficially the current median income (per household size) for NY is:

1 mortal ,803
2 people ,898
3 people ,477
4 people ,966

In other words, if you acquire less than that amount (depending on your household size) in NY you are automatically eligible to file Ch 7 (the bankruptcy Chapter that discharges all debts).

If you acquire more than the median, it does NOT mean that you automatically must file Ch 13 (the one in which you commit future disposable income to at least partial repayment of your debts). It means that your attorney will need to complete the “long form” of the Means Test, which grants deductions for various expenses (similar to the long form of an income tax return). Most bankruptcy attorneys report that a great many clients who, on first glance, APPEAR not to pass the Means Test, actually do pass it (i.e., can file Ch 7) after all the acquirable deductions are taken on the Long Form of the Means Test.

Make an appointment with a local bankruptcy attorney to receive an assessment of your particular situation. Most offer one free or very low cost appointment to review your particular financial situation and advise you regarding your bankruptcy and non-bankruptcy options.

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Is there a legal document that can discharge a primary cardholders responsibility from authorize user’s debt?

Question by jingz: Is there a legal document that can discharge a primary cardholders responsibility from authorize user’s debt?
Our relative who bankrupted before uses my refer to apply for credit cards, but recently defaulted on couple of them. My relative is going to pay for the debt, but is there anyway for me to be release of this obligation? Is there any document that my relative to sign and free me from the responsibility?

Best answer:

Answer by Jeanne R
Unfortunately the only way for you to be released is to file a Police report for the Identity Theft and the fraud. Your relative might state that he/she is going to pay the debt but can you really trust someone who has perpetrated a criminal fraud? Basically unless the mortal in question pays the debts in full NOW, you really have no other option.

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Will my bankruptcy chapter 7 unsecured debt discharge of 09 affect my tax return?

Question by Angelwing: Will my bankruptcy chapter 7 unsecured debt discharge of 09 affect my tax return?

Best answer:

Answer by efflandt
What do you mean “affect”. I don’t think they can suck it up directly, but you might be required to turn over some or all of it to your trustee (depending upon when bk was discharged), since it could have been used to pay your creditors sooner if you had proper tax withholding.

What do you think? Answer below!

Why is Biden siding with the credit card people so that you will not be able to discharge the debt?

Question by Obama 2012, all worn out: Why is Biden siding with the credit card people so that you will not be healthy to discharge the debt?
via bankruptcy?

He isn’t sworn in and I hate him already.

Best answer:

Answer by wizjp
uh…sat some point there has to be some individualized fiscal responsibility.

Bankruptcy should be reserved for discharging debits caused by a situation, not just a desire to run up large bills and achievement away without any responsibility.

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If my spouce files for bankruptcy, will the discharge of her debt remove my financial responsibility?

Question by Physician Config: If my spouce files for bankruptcy, will the discharge of her debt remove my financial responsibility?
My spouce added my study to her credit cards as a co-signer and now she is filing bankruptcy. She is including the cards in the filing. If the debt is discharged will I still be responsible for the debt as a co-signer?

Best answer:

Answer by No Problem!
Try the site below for research on this issue. Make sure to change the State/Location in which you live. Hope this helps.

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Q&A: Will Obama discharge my credit card & student loan debt?

Question by Beltran: Will Obama discharge my credit card & student loan debt?
I have ,000 debt in credit card & student loans will Obama create a program for the rich to pay my debts or to at least have the government discharge my debts?

Best answer:

Answer by Ali
No.

What do you think? Answer below!

Denial of debt discharge in chapter 7 bankruptcy

A much wanted discharge of debt that a debtor gets mostly after filing for chapter 7 bankruptcy acts as a great source of relaxation for an indebted borrower. It releases the debtor form individualized liabilities for most of the debts and it also prevents the creditors from carrying on any further collection processes against the debtor. A debtor basically opts for bankruptcy chapter 7 as the last resort when he finds himself absolutely unable to pay even the reduced debt amount after debt settlement. The process of filing for bankruptcy chapter 7 is full of exceptions and complex formalities, which require an smart and competent Debt lawyers with his recommendations and advices. In nearly 99 percent of chapter 7 bankruptcy cases, the debt gets discharged by the court of law within 60 to 90 days from the first meeting date with the creditors. At rare cases however, the court can deny discharge to debt and thus can nullify the whole petition made by the debtor. Though the grounds for denial of debt discharge are narrow, the other probable reasons that drive the court to deny discharge to debt are as follows:
1. In cases when a debtor fails to produce sufficient proofs of income or financial records or he fails to pass the means and median test.

2. In cases when a debtor fails to satisfactorily explain any loss of assets.

3. In cases if the debtor has committed any bankruptcy crime such as perjury.

4. In cases of fraudulent transfer, concealment or destruction of the property of estates by the debtor or his side.

5. In cases of unfortunate to complete an approved instructional course concerning financial management.

Apart from these, there are certain debts that do not start under the jurisdiction of discharge by the court. However, most of the debtor’s debts can be discharged by the chapter 7 bankruptcy petition after fulfilling the stipulations and eligibility; some debts do not start under these criteria which are:
• Child support and alimony debt
• Taxes of certain kinds
• Education loans
• Criminal restitution debts
• Debts due to willful and malicious injury caused by the debtor to another mortal or property, or
• Debts due to injury or harm caused with a motor car by the debtor to another mortal or property under the effect of liquor or similar intoxication.
Under these above mentioned circumstances, the debtor will be liable to continue with the debt payment. However, the court is likely to discharge debt for these conditions until the creditors intrude with the law proceedings and prevails therein by producing proper witnesses and proofs against the debtor’s illegitimacy or adulteration of case.
Moreover, the court can revoke a debt discharge made under chapter 7 bankruptcy, if a trustee, creditor or the U.S. trustee request it to do so, on the grounds of false pretences and fraudulence by the debtor, marital misstatement or unfortunate of providing documents and other information regarding audit of the debtor’s case.

Denial-of-debt relief in Chapter 7 bankruptcy

What happens if I enter the wrong “date incurred” for a debt when filing bankruptcy?

rose Asked:
What happens if I enter the wrong “date incurred” for a debt when filing bankruptcy?

I try to bankruptcy without Attourney because frankly, if I $ 1,000.00 or more extra dollars lying around to a lawyer I would not pay had submitted file. However, there are places on the form you need to “date incurred” for any debt you also list. Some of these demands are very old and I can not remember when I was earned. Some of them are credit cards and more charges are incurred over a longer period on an account. I’m worried that if I will be a imitation “date” there are some, such as the discharge of the effect that debt. For example, if I were created in 2004 for a debt in 2003, would be a lot prior to the day I joined (2004) due to excluded or would the total debt ratio will be excluded if the data are not correct? Will my bankruptcy is not uncontested when the data are wrong? What are the guidelines?

Best answer:

Answer by GUS
You can get a copy of your credit report. Your credit report will list the date the statement was opened. This is what most people do when filing BK. Your credit report will only cost a few bucks.

The listing of a wrong date would probably have no effect on your BK filing. A BK filing normally covers all debts, even those you might unintentionally omit from the paperwork. Some of my accounts had missing information on the credit report listing and my attorney told me to place down my ideal guess for these accounts. Good Luck

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Mortgage Forgiveness Debt Relief Act

If you owe a debt to someone else and they cancel or forgive that debt, the canceled amount might be taxable.

The Mortgage Debt Relief Act of 2007 generally grants taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.

This supplying applies to debt forgiven in calendar years 2007 through 2012. Up to million of forgiven debt is eligible for this exclusion ( million if married filing separately). The exclusion does not apply if the discharge is due to services performed for the lender or any other reason not directly related to a decline in the home’s value or the taxpayer’s financial condition.

The following are the most commonly asked questions and answers about The Mortgage Forgiveness Debt Relief Act and debt cancellation:

What is Cancellation of Debt?
If you borrow money from a commercial lender and the lender later cancels or forgives the debt, you might have to include the cancelled amount in income for tax purposes, depending on the circumstances. When you borrowed the money you were not required to include the loan proceeds in income because you had an obligation to repay the lender. When that obligation is subsequently forgiven, the amount you received as loan proceeds is normally reportable as income because you no longer have an obligation to repay the lender. The lender is usually required to report the amount of the canceled debt to you and the IRS on a Form 1099-C, Cancellation of Debt.

Here’s a very simplified example. You borrow ,000 and default on the loan after paying back ,000. If the lender is unable to collect the remaining debt from you, there is a cancellation of debt of ,000, which generally is taxable income to you.

Is Cancellation of Debt income always taxable?
Not always. There are some exceptions. The most common situations when cancellation of debt income is not taxable involve:

Qualified principal residence indebtedness: This is the exception created by the Mortgage Debt Relief Act of 2007 and applies to most homeowners.
Bankruptcy: Debts discharged through bankruptcy are not considered taxable income.
Insolvency: If you are insolvent when the debt is cancelled, some or all of the cancelled debt might not be taxable to you. You are insolvent when your total debts are more than the clean market value of your total assets.
Certain farm debts: If you incurred the debt directly in operation of a farm, more than half your income from the prior three years was from farming, and the loan was owed to a mortal or bureau regularly engaged in lending, your cancelled debt is generally not considered taxable income.
Non-recourse loans: A non-recourse loan is a loan for which the lender’s only cure in case of default is to repossess the property being financed or used as collateral. That is, the lender can't oppose you personally in case of default. Forgiveness of a non-recourse loan resulting from a foreclosure does not result in cancellation of debt income. However, it might result in other tax consequences.

Exceptions

What is the Mortgage Forgiveness Debt Relief Act of 2007?
The Mortgage Forgiveness Debt Relief Act of 2007 was enacted on December 20, 2007 (see News Release IR-2008-17). Generally, the Act grants exclusion of income realized as a result of modification of the terms of the mortgage, or foreclosure on your principal residence.

What does exclusion of income mean?
Normally, debt that is forgiven or cancelled by a lender must be included as income on your tax return and is taxable. But the Mortgage Forgiveness Debt Relief Act grants you to exclude certain cancelled debt on your principal residence from income. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.

Does the Mortgage Forgiveness Debt Relief Act apply to all forgiven or cancelled debts?
No. The Act applies only to forgiven or cancelled debt used to buy, build or substantially improve your principal residence, or to refinance debt incurred for those purposes. In addition, the debt must be secured by the home. This is known as eligible principal residence indebtedness. The maximum amount you can treat as eligible principal residence indebtedness is million or million if married filing
separately.

Does the Mortgage Forgiveness Debt Relief Act apply to debt incurred to refinance a home?
Debt used to refinance your home qualifies for this exclusion, but only to the extent that the principal equilibrise of the old mortgage, immediately before the refinancing, would have qualified. For more information, including an example, see Publication 4681.

How long is this special relief in effect?
It applies to eligible principal residence indebtedness forgiven in calendar years 2007 through 2012.

Is there a limit on the amount of forgiven eligible principal residence indebtedness that can be excluded from income?
The maximum amount you can treat as eligible principal residence indebtedness is million ( million if married filing separately for the tax year), at the time the loan was forgiven. If the equilibrise was greater, see the instructions to Form 982 and the detailed example in Publication 4681.

If the forgiven debt is excluded from income, do I have to report it on my tax return?
Yes. The amount of debt forgiven must be reported on IRS Form 982 and this form must be attached to your tax return.

Do I have to complete the entire Form 982?
No. Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Adjustment), is used for other purposes in addition to reporting the exclusion of forgiveness of eligible principal residence indebtedness. If you are using the form only to report the exclusion of forgiveness of eligible principal residence indebtedness as the result of foreclosure on your principal residence, you only need to complete lines 1e and 2. If you kept ownership of your home and modification of the terms of your mortgage resulted in the forgiveness of eligible principal residence indebtedness, complete lines 1e, 2, and 10b. Attach the Form 982 to your tax return.

Where can I get this form?
If you use a individualized to fill out your return, check your tax-preparation software. You can also download the form at IRS.gov, or call 1-800-829-3676. If you call to order, please grant 7-10 days for delivery.

How do I know or find out how much debt was forgiven?
Your lender should send a Form 1099-C, Cancellation of Debt, by February 2, 2009. The amount of debt forgiven or cancelled will be shown in box 2. If this debt is all eligible principal residence indebtedness, the amount shown in box 2 will generally be the amount that you enter on lines 2 and 10b, if applicable, on Form 982. 

Can I exclude debt forgiven on my second home, credit card or automobile loans?
Not under this provision. Only cancelled debt used to buy, build or improve your principal residence or refinance debt incurred for those purposes qualifies for this exclusion. See Publication 4681 for further details.

If part of the forgiven debt doesn’t remember for exclusion from income under this provision, is it doable that it might remember for exclusion under a different provision?
Yes. The forgiven debt might remember under the insolvency exclusion. Normally, you are not required to include forgiven debts in income to the extent that you are insolvent.  You are insolvent when your total liabilities exceed your total assets. The forgiven debt might also remember for exclusion if the debt was discharged in a Title 11 bankruptcy proceeding or if the debt is eligible farm indebtedness or eligible real property business indebtedness. If you believe you remember for any of these exceptions, see the instructions for Form 982. Publication 4681 discusses apiece of these exceptions and includes examples.

I lost money on the foreclosure of my home. Can I claim a loss on my tax return?
No.  Losses from the understanding or foreclosure of individualized property are not deductible. 

If I sold my home at a loss and the remaining loan is forgiven, does this constitute a cancellation of debt?
Yes. To the extent that a loan from a lender is not fully satisfied and a lender cancels the unsatisfied debt, you have cancellation of indebtedness income. If the amount forgiven or canceled is 0 or more, the lender must generally issue Form 1099-C, Cancellation of Debt, showing the amount of debt canceled. However, you might be healthy to exclude part or all of this income if the debt was eligible principal residence indebtedness, you were insolvent immediately before the discharge, or if the debt was canceled in a title 11 bankruptcy case.  An exclusion is also acquirable for the cancellation of certain non-business debts of a eligible individual as a result of a disaster in a Midwestern disaster area.  See Form 982 for details.

If the remaining equilibrise owed on my mortgage loan that I was personally liable for was canceled after my foreclosure, might I still exclude the canceled debt from income under the eligible principal residence exclusion, even though I no longer own my residence? 
Yes, as long as the canceled debt was eligible principal residence indebtedness. See Example 2 on page 13 of Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments.

Will I receive notification of cancellation of debt from my lender?
Yes. Lenders are required to send Form 1099-C, Cancellation of Debt, when they cancel any debt of 0 or more. The amount cancelled will be in box 2 of the form.

What if I disagree with the amount in box 2?
Contact your lender to work out any discrepancies and have the lender issue a corrected Form 1099-C.

How do I report the forgiveness of debt that is excluded from gross income?
(1) Check the appropriate box under line 1 on Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment) to indicate the type of discharge of indebtedness and enter the amount of the discharged debt excluded from gross income on line 2.  Any remaining canceled debt must be included as income on your tax return.

(2) File Form 982 with your tax return.

My student loan was cancelled; will this result in taxable income?
In some cases, yes. Your student loan cancellation will not result in taxable income if you concurred to a loan supplying requiring you to work in a certain profession for a specified period of time, and you fulfilled this obligation.

Are there other conditions I should know about to exclude the cancellation of student debt?
Yes, your student loan must have been made by:

(a) the federal government, or a say or local government or subdivision;

(b) a tax-exempt public benefit corporation which has control of a state, county or municipal hospital where the employees are considered public employees; or

(c) a school which has a program to encourage students to work in underserved occupations or areas, and has an agreement with one of the above to fund the program, under the direction of a governmental unit or a charitable or educational organization.

Can I exclude cancellation of credit card debt?
In some cases, yes. Non-business credit card debt cancellation can be excluded from income if the cancellation occurred in a title 11 bankruptcy case, or to the extent you were insolvent just before the cancellation. See the examples in Publication 4681.

How do I know if I was insolvent?
You are insolvent when your total debts exceed the total clean market value of all of your assets.  Assets include everything you own, e.g., your car, house, condominium, furniture, life insurance policies, stocks, other investments, or your pension and other retirement accounts.

How should I report the information and items needed to establish insolvency?
Use Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment) to exclude canceled debt from income to the extent you were insolvent immediately before the cancellation.  You were insolvent to the extent that your liabilities exceeded the clean market value of your assets immediately before the cancellation.

To claim this exclusion, you must attach Form 982 to your federal income tax return.  Check box 1b on Form 982, and, on line 2, include the smaller of the amount of the debt canceled or the amount by which you were insolvent immediately prior to the cancellation.  You must also reduce your tax attributes in Part II of Form 982.

My automobile was repossessed and I received a 1099-C; can I exclude this amount on my tax return?
Only if the cancellation happened in a title 11 bankruptcy case or to the extent you were insolvent just before the cancellation. See IRS Publication 4681 for examples.

Debt relief programs as offered by Federal Debt Relief Program are one of the ideal ways to refrain bankruptcy and get answers to bankruptcy questions.

Mortgage Forgiveness Debt Relief Act

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