Forgiven debt may be taxable by the IRS!
The Second Circuit has ruled that debt collectors don’t need to warn clients of the potential tax liabilities associated when making a settlement offer for less than the full amount owed.
In Isaac Altman v. J.C. Christensen & Associates Inc., docket number 14-2240, the U.S. Court of Appeals for the Second Circuit stated in it’s opinion that the “fact that a debtor may then have to pay tax on the amount saved is simply not deceptive…”
Isaac Altman received a letter from J.C. Christensen & Associates stating that he could save up to 50 percent on his $6,000 debt if he made a payment upfront. Altman alleged the letter was deceptive violated the FDCPA’s prohibition against false, deceptive, or misleading representations. As stated above, the Court was not convinced.
So, you may want to consult your accountant/tax preparer before accepting a debt settlement offer. Additionally, you generally won’t have this tax issue if you file for chapter 7 bankruptcy. Therefore, it may be in your best interest to also consult a bankruptcy attorney.
The Law Firm of Vaughn & Weber, PLLC
393 Jericho Tpke. #208
Mineola, NY 11501
In New York, determining maintenance (spousal support or alimony) can be a burdensome task. This task can become more complicated in situations where one spouse is receiving disability or a long term/permanent personal injury settlement in the form of a tax free annuity. Although the line between separate property and marital property with regard to such payments is often blurred, the fact of the matter is that these payments can have an effect on child support and even maintenance. Disability or annuity income can be factored in for the purposes of calculating how much maintenance a spouse should be paying to the injured party.
More importantly, the disability or annuity income should be used by the disabled spouse for the purpose of taking care of the children. This money should not be discounted when determining who pays carrying costs. It absolutely should be used to contribute to the support of the children.
If you are contemplating a divorce in which one of the spouses is receiving some type of disability or personal injury settlement payment, call (516) 858-2620 to speak to a divorce attorney today!
Standing in Landlord Tenant Court
Standing is an affirmative defense that finds its way into many Answers in Landlord Tenant Court. Standing refers to the right of the petitioner/landlord to bring the case in the first place. The quick rule of thumb to decipher whether or not a petitioner has Standing is if the petitioner appears on the deed to the property on the date that the action was commenced. An action is commenced on the date that the index number is purchased with the Court.
In cases where Standing is at issue, it is necessary to determine whether or not a Power of Attorney has given the authority to prosecute a case to another individual than whom appears on the deed. It is important to note that the petitioner should in most cases still be the person named as owner on the property deed.
If you are involved in a current landlord tenant proceeding or are considering bringing a landlord tenant action, call (516) 858-2620 to speak to a landlord tenant attorney today!