إظهار الرسائل ذات التسميات pre settlement loans. إظهار كافة الرسائل
إظهار الرسائل ذات التسميات pre settlement loans. إظهار كافة الرسائل
on الثلاثاء، 4 مارس 2014
The concept, although quite simple, can
actually be very confusing for consumers, especially because of false
information offered by some debt relief sales people.
The bottom line: Unless exempted by the insolvency rules or another exemption, you will owe taxes on debt that has been forgiven
by a creditor. In this article I assume that none of the exemptions
apply.
Some of my clients have expressed an
attitude of distaste that after finally getting out from under a
crushing debt load, they were hit with a tax bill on that forgiven debt.
They felt it was a bit unfair and perhaps a little mean spirited by
good old Uncle Sam. The aim of this article is not an attempt at a
justification either for or against taxing a consumer on a forgiven
debt, but simply an explanation to show why everyone’s favorite uncle
expects you to pay up when your former lender lets you off the hook.
Why must I pay Taxes on Debt Settlement?
The best way to illustrate this is with
an example. You borrow $10,000 from a bank and promise to pay it back
with interest. You pay no taxes on that $10,000 because it is a loan and
not income. Now your business gets hit hard by the economic downturn
and you are no longer able to keep up on your monthly payments. After
falling behind several months, the bank offers to accept $5,000 as
payment in full and forgive the additional $5,000 that you owed. You
accept the deal and receive a 1099-C the following January for $5,000.
Why?
When the bank agrees not to collect the
additional $5,000 from you, it is going to write it off on their taxes
as a loss. This means that that bank will be able to earn $5,000 in tax
free income, essentially because it gave the money to you. So if the IRS
can’t collect that income from the bank, they are going to go looking
to collect it from the person that let the bank off the hook for it.
When you first took out the loan, the
money was not taxable because you were going to pay it back. Now that
you have been given $5,000 by the bank and no longer have to pay it
back, it is no different then getting a second job and earning $5,000
and you would naturally have to pay taxes on that income.
So Uncle Sam is not coming after
consumers simply to kick them while they are down. The IRS is simply
collecting tax on $5,000 dollars in income that you received from the
bank.
To Avoid Taxes on a Debt Settlement should I just never Settle a Debt?
As
much as people usually cringe at the thought owing money to the IRS,
the decision to attempt to settle a debt with the creditor should not be
based solely on whether or not the settlement will result in a tax
liability. I am quick to point out to my clients who find taxes on debt settlement
to be unfair, that paying taxes on $5,000 dollars will cost them a lot
less money then paying the $5,000 in full plus interest over several
years.
If you can afford to pay your debts then
you should of course pay them. However, if your financial situation has
reached a point where you need to look at some drastic options, debt settlement is a good idea
to consider. The fact that you may or may not owe taxes on a debt
settlement is something that needs to be considered but really only to
the extent that the economics of the settlement will still make sense
and that you have the funds to pay the taxes when they are due.
If you are a plaintiff and going through the legal process of obtaining fair compensation for your lawsuit, settlement funding may help. Pre settlement funding is a financial product that is provided by a legal funding investor to a plaintiff in a personal injury or commercial lawsuit. If you have a pending case that has been recently filed or has been going through the process for months, you may qualify for pre settlement funding with LawLeaf.
What is pre settlement funding?
Pre settlement funding is a financial instrument that is used by plaintiffs. This tool is provided to a plaintiff and if and when the case settles, the client will pay the advance back with interest. There is no other financial tool available that provides a client with a non recourse agreement. If you are approved for an advance and you lose your case, you don't have to repay the lender. The lawsuit is used collateral and if proceeds are not collected through a settlement or verdict, you owe nothing.
Can pre settlement funding help you?
You may have been offered a settlement on your lawsuit. The settlement may be partially worth the total value of the case. If you decide you don't want to settle your lawsuit but can't financially sustain, pre settlement funding may be for you. This financial tool should only be used if you have exhausted other alternatives.
I am a plaintiff in a lawsuit and I am interested in pre settlement funding. What can I use the money for?
Pre settlement funding can be used for almost anything. Most of our clients will use the money to help pay for bills. These bills may include medical expenses, living expenses, transportation and groceries. We do not care how the money is spent.
Can I obtain money if I don't have a lawyer?
No, pre settlement funding can only be obtained if you have the representation of a lawyer. If you are representing yourself, unfortunately we can't secure you an advance against the claim.
What are some of the cases I can obtain financing for?
If you are looking for additional information on lawsuit funding, contact LawLeaf today.
What is pre settlement funding?
Pre settlement funding is a financial instrument that is used by plaintiffs. This tool is provided to a plaintiff and if and when the case settles, the client will pay the advance back with interest. There is no other financial tool available that provides a client with a non recourse agreement. If you are approved for an advance and you lose your case, you don't have to repay the lender. The lawsuit is used collateral and if proceeds are not collected through a settlement or verdict, you owe nothing.
Can pre settlement funding help you?
You may have been offered a settlement on your lawsuit. The settlement may be partially worth the total value of the case. If you decide you don't want to settle your lawsuit but can't financially sustain, pre settlement funding may be for you. This financial tool should only be used if you have exhausted other alternatives.
I am a plaintiff in a lawsuit and I am interested in pre settlement funding. What can I use the money for?
Pre settlement funding can be used for almost anything. Most of our clients will use the money to help pay for bills. These bills may include medical expenses, living expenses, transportation and groceries. We do not care how the money is spent.
Can I obtain money if I don't have a lawyer?
No, pre settlement funding can only be obtained if you have the representation of a lawyer. If you are representing yourself, unfortunately we can't secure you an advance against the claim.
What are some of the cases I can obtain financing for?
- Amusement Park Accidents
- Asbestos settlement
- Assault & Battery
- Auto Accident
- Boat Accidents
- Bus Accident
- Car Accidents
- Construction Accidents
- Dog Bites
- Drinking & Driving
- Mesothelioma
- Motor Vehicle Accident
- Pedestrian Accident
- Personal Injury
- Plane Accidents
- Workers Compensation
- Wrongful Death
If you are looking for additional information on lawsuit funding, contact LawLeaf today.
If you are a plaintiff in a lawsuit in which you were hurt and you are seeking compensation for damages, you might qualify for pre settlement funding. Pre settlement funding is a tool that provides money to a plaintiff before or during the course of a lawsuit. The money that is borrowed is non recourse, which means if you lose the lawsuit for any reason, you don't have to repay the cash advance.
There is no other financial product in the market that will allow a person to borrow against the chances their lawsuit will settle; that was until pre settlement funding entered into the law markets. Pre settlement funding is provided by hedge funds and/or investors that gamble on a set of cases, in hopes of a positive gain. While their investment is secured through an underwriting process, there are some cases which the investor will lose.
You may have heard of the word contingency fee basis, considering you are probably going through a lawsuit. This is also true for plaintiffs that borrow against their lawsuit. If no recovery, no payment.
The nature of pre settlement funding is dynamic. There is no other financial tool like it. You can have bad credit or no credit, be without a job, be in debt and own no assets and still get $10's of thousands of dollars through a legal advance. Try this with a bank. This is because pre settlement funding is provided using the future proceeds from the case as collateral. In return the plaintiff will agree to a contract with the lender to pay back, if and when the win, the principle plus interest.
At LawLeaf we provide pre settlement funding for a variety of different personal injury cases including but not limited to:
There is no other financial product in the market that will allow a person to borrow against the chances their lawsuit will settle; that was until pre settlement funding entered into the law markets. Pre settlement funding is provided by hedge funds and/or investors that gamble on a set of cases, in hopes of a positive gain. While their investment is secured through an underwriting process, there are some cases which the investor will lose.
You may have heard of the word contingency fee basis, considering you are probably going through a lawsuit. This is also true for plaintiffs that borrow against their lawsuit. If no recovery, no payment.
The nature of pre settlement funding is dynamic. There is no other financial tool like it. You can have bad credit or no credit, be without a job, be in debt and own no assets and still get $10's of thousands of dollars through a legal advance. Try this with a bank. This is because pre settlement funding is provided using the future proceeds from the case as collateral. In return the plaintiff will agree to a contract with the lender to pay back, if and when the win, the principle plus interest.
At LawLeaf we provide pre settlement funding for a variety of different personal injury cases including but not limited to:
- Amusement Park Accidents
- Asbestos settlement
- Assault & Battery
- Auto Accident
- Boat Accidents
- Bus Accident
- Car Accidents
- Construction Accidents
- Dog Bites
- Drinking & Driving
- Mesothelioma
- Motor Vehicle Accident
- Pedestrian Accident
- Personal Injury
- Plane Accidents
- Workers Compensation
- Wrongful Death
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