Tax Consequences of Debt Relief Services

Depending on your financial condition, the amount of any savings you obtain from debt relief services can be considered income and taxable. card companies and others may report settled debt to the , and the IRS considers it income, unless you are “insolvent.”

You are insolvent when your total debts are more than the fair market value of your total assets. Insolvency can be fairly complex to determine – please talk to a tax professional if are not sure whether you qualify for this exception.