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November 2014 Archives

Filing chapter 13 bankruptcy

People who are considering filing bankruptcy in Washington, D.C., may be confused by the different chapters. Chapter 13, also known as an individual debt adjustment, provides several advantages over choosing liquidation under chapter 7.

Consumers need to be aware of their rights

During the recent recession, many District of Columbia residents had difficulty paying their credit card debt. This has led to some aggressive methods of debt recovery, so it is important for consumers to be aware of the statute of limitations on their debt and understand their rights under the federal Fair Debt Collection Practices Act.

Handling a lawsuit by a debt collector

People in the District of Columbia may face aggressive collection activities at times, including lawsuits. While some creditors may have legitimate reasons for legal action, others may make threats about such action as part of an effort to elicit payment. It may be difficult to discern whether a notice of legal action is valid or not, making it important to inspect any claims of legal activity to ensure that a valid lawsuit is not ignored.

Dealing with credit card debt in Washington, D.C.

While having credit card debt forgiven can be a good thing, it could also come with unexpected tax consequences. The IRS considers any debt cancellation or forgiveness in an amount of at least $600 to be taxable income. This amount must be accounted for as other income on line 21 of Form 1040. The debtor will be told how much of the forgiveness is considered taxable income when they receive Form 1099-C from the creditor.

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