Goldman & Beslow LLC
East Orange: 973-677-9000
Paterson: 973-247-9445
Jersey City: 201-659-6226
Toll Free: 888-827-5493
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Tax Consequences of Bankruptcy

Bankruptcy will not result in an increase of your personal income tax. When a debt is discharged in bankruptcy, the discharge is not a taxable event and therefore will not result in an increase in your taxes.

The reason why there is some confusion about taxes and bankruptcy is that when a debt is normally forgiven or canceled, income tax is owed on the amount forgiven or canceled. The Internal Revenue Code negates this consequence if you file for bankruptcy.

Debt consolidation or settlement companies will not tell you that if the debt you owe to a creditor is reduced or canceled, you will be taxed on the amount of the debt that was reduced or canceled. You will not be taxed however if you were insolvent at the time of cancellation.

The Mortgage Debt Forgiveness Act of 2007 which expires in 2012, prevents most homeowners who are foreclosed on or who completed a short sale from owing taxed on the forgiven mortgage debt. Your attorney or accountant can explain this law, as there are exceptions to the taxable issue.

Contact Goldman & Beslow, LLC to discuss these issues,

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PROFESSIONAL ASSOCIATIONS

  • NACBA | National Association of Consumer Bankruptcy Attorneys
  • NACA | National Association of Consumer Advocates
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Goldman & Beslow LLC

Goldman & Beslow, LLC is a Federal Debt Relief Agency by an Act of Congress. We have proudly assisted consumers seeking relief under the U.S. Bankruptcy Code for over 38 years.

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EAST ORANGE
OFFICE
7 Glenwood Avenue,
Suite 311B
East Orange, NJ 07017
East Orange Law Office

Phone: 973-414-8069
Phone: 973-419-7631
Phone: 973-419-5266
Phone: 201-205-2496
Toll Free: 888-827-5493
Fax: 973-675-5886
E-mail the firm

NEWARK OFFICE 168 Bloomfield Avenue
Newark, NJ 07104
Newark Law Office

Phone: 973-483-1333
Phone: 973-419-5266
Phone: 201-205-2496
Toll Free: 888-827-5493
E-mail the firm

PATERSON OFFICE 100 Hamilton Plaza,
Suite 405
Paterson, NJ 07510
Paterson Law Office

Phone: 973-247-9445
Phone: 973-419-5266
Phone: 201-205-2496
Toll Free: 888-827-5493
E-mail the firm

JERSEY CITY OFFICE 26 Journal Square,
Suite 603
Jersey City, NJ 07306
Jersey City Law Office

Phone: 201-659-6226
Phone: 973-419-5266
Phone: 201-205-2496
Toll Free: 888-827-5493
E-mail the firm

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