Consolidating someone elses debt

The best way to consolidate debt varies by individual, depending on your financial circumstances and preferences.For some, the best way to consolidate debt may be paying off smaller balances first and then adding those payments to the bigger bills until those are paid off.You had every intention — and obligation — to repay the loan, but things got tight and you can’t pay the other ,000.Once your creditor (or debt collection agency) stops attempting to collect from you, the sum of ,000 effectively has been given to you.

However, consolidating balances to one credit card or using a loan can be risky because, if you need to borrow additional money, it may be tempting to use one of the accounts with a zero balance.

This area belongs almost exclusively to the debt settlement domain, but also could include personal loans you default on.

Here are examples of both Suppose you have ,000 in credit card debt and choose a debt settlement program to get the number down where you could actually pay it off. The card company will send you an IRS Form 1099-C at the end of the year that reports the ,000 as income.

The debt settlement company comes back with good news that if you pay ,000, the card company will forgive the last ,000. The IRS says you got ,000 worth of goods and services with that money, but never paid it back, so it’s income and goes on Line 21 of your tax return.

The same thing happens if you take out a personal loan for ,000 and default on it after paying back just

However, consolidating balances to one credit card or using a loan can be risky because, if you need to borrow additional money, it may be tempting to use one of the accounts with a zero balance.

This area belongs almost exclusively to the debt settlement domain, but also could include personal loans you default on.

Here are examples of both Suppose you have $25,000 in credit card debt and choose a debt settlement program to get the number down where you could actually pay it off. The card company will send you an IRS Form 1099-C at the end of the year that reports the $10,000 as income.

The debt settlement company comes back with good news that if you pay $15,000, the card company will forgive the last $10,000. The IRS says you got $10,000 worth of goods and services with that money, but never paid it back, so it’s income and goes on Line 21 of your tax return.

The same thing happens if you take out a personal loan for $5,000 and default on it after paying back just $1,000.

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However, consolidating balances to one credit card or using a loan can be risky because, if you need to borrow additional money, it may be tempting to use one of the accounts with a zero balance.This area belongs almost exclusively to the debt settlement domain, but also could include personal loans you default on.Here are examples of both Suppose you have $25,000 in credit card debt and choose a debt settlement program to get the number down where you could actually pay it off. The card company will send you an IRS Form 1099-C at the end of the year that reports the $10,000 as income.The debt settlement company comes back with good news that if you pay $15,000, the card company will forgive the last $10,000. The IRS says you got $10,000 worth of goods and services with that money, but never paid it back, so it’s income and goes on Line 21 of your tax return.The same thing happens if you take out a personal loan for $5,000 and default on it after paying back just $1,000.

,000.

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