One year has passed since we started our debt free life plan...I think, all in all, we've made good progress, although it has slowed down of late. We are just going to keep plodding through this...Below is our status:
1. CitiCards (Amex) $8,575.42
2. BofA CC $3,657.98
3. BofA LC $38,084.26
4. CitiCards (Student Visa) $2,362 Settled 1/09 35% of balance owed!
5. USAA $12,467.66
6. WAMU/Chase $1,102.49 Settled 10/09 50% of balance owed!
7. Capitol One $1,663.79 Settled 8/09 40% of balance owed!
8. Chase Cards $1,374.46 Settled 3/09 50% of balance owed!
9. Credit Union CC $1,402.56
10. Victoria's Secret $242.45
11. Car 1 $3,503.10 Sold 10/09
12. Car 2 $10,984.12
13. Harley $2,400
14. Bally's $424.80
15. Discover Card $9,361.86
Total Debt Remaining $87,601.11
In our first year, we have managed to pay off $22,722.07. I don't think that's too shabby, but we still have a lot of work cut out for us with $87,601.11 left to pay off next year in order to fulfill our plan. Wish us luck and have a happy and debt free new year!
Thursday, December 31, 2009
Tuesday, December 1, 2009
December Status Report
Not much has happened lately with the debt. We are saving up for another big settlement and just slowly working our way through this. With every payoff, we free much needed cash flow and we expect that our progress will quicken with a just a couple more settlements. Wish us luck! Here is our debt status:
1. CitiCards (Amex) $8,675.42
2. BofA CC $3,657.98
3. BofA LC $38,084.26
4. CitiCards (Student Visa) $2,362 Settled 1/09 35% of balance owed!
5. USAA $12,593.66
6. WAMU/Chase $1,102.49 Settled 10/09 50% of balance owed!
7. Capitol One $1,663.79 Settled 8/09 40% of balance owed!
8. Chase Cards $1,374.46 Settled 3/09 50% of balance owed!
9. Credit Union CC $1386.18
10. Victoria's Secret $242.45
11. Car 1 $3,503.10 Sold 10/09
12. Car 2 $10,984.12
13. Harley $3,000
14. Bally's $424.80
15. Discover Card $9,557.86
Total Debt Remaining $88,606.73
1. CitiCards (Amex) $8,675.42
2. BofA CC $3,657.98
3. BofA LC $38,084.26
4. CitiCards (Student Visa) $2,362 Settled 1/09 35% of balance owed!
5. USAA $12,593.66
6. WAMU/Chase $1,102.49 Settled 10/09 50% of balance owed!
7. Capitol One $1,663.79 Settled 8/09 40% of balance owed!
8. Chase Cards $1,374.46 Settled 3/09 50% of balance owed!
9. Credit Union CC $1386.18
10. Victoria's Secret $242.45
11. Car 1 $3,503.10 Sold 10/09
12. Car 2 $10,984.12
13. Harley $3,000
14. Bally's $424.80
15. Discover Card $9,557.86
Total Debt Remaining $88,606.73
Saturday, October 31, 2009
November Status Report
October was a good month as far as paying off debts goes...we settled one credit card, sold one of our cars, and made progress on the rest...However the total number does not reflect much progress because of some returned payments. Our current status is as follows:
1. CitiCards (Amex) $8,775.42
2. BofA CC $3,657.98
3. BofA LC $38,084.26
4. CitiCards (Student Visa) $2,362 Settled 1/09 35% of balance owed!
5. USAA $12,581.34
6. WAMU/Chase $1,102.49 Settled 10/09 50% of balance owed!
7. Capitol One $1,663.79 Settled 8/09 40% of balance owed!
8. Chase Cards $1,374.46 Settled 3/09 50% of balance owed!
9. Credit Union CC $1428.24
10. Victoria's Secret $242.45
11. Car 1 $3,503.10 Sold 10/09
12. Car 2 $11,272.74
13. Harley $3,200
14. Bally's $424.80
15. Discover Card $9,753.86
Total Debt Remaining $89,421.09
1. CitiCards (Amex) $8,775.42
2. BofA CC $3,657.98
3. BofA LC $38,084.26
4. CitiCards (Student Visa) $2,362 Settled 1/09 35% of balance owed!
5. USAA $12,581.34
6. WAMU/Chase $1,102.49 Settled 10/09 50% of balance owed!
7. Capitol One $1,663.79 Settled 8/09 40% of balance owed!
8. Chase Cards $1,374.46 Settled 3/09 50% of balance owed!
9. Credit Union CC $1428.24
10. Victoria's Secret $242.45
11. Car 1 $3,503.10 Sold 10/09
12. Car 2 $11,272.74
13. Harley $3,200
14. Bally's $424.80
15. Discover Card $9,753.86
Total Debt Remaining $89,421.09
Saturday, October 17, 2009
October Status Report
Sorry this blog is a little late...we are now in month number 10 of our two year plan and I am glad to report that we made some good progress this month. We sold our second less fuel efficient vehicle and used some of the proceeds to SETTLE debt. Also, I had to make an addition to the list of debts...for some reason I have forgotten to include my Discover Card. If the numbers from the prior months don't match up to this month, its because I added in Discover Card.
1. CitiCards (Amex)- $8,875.42
2. BofA CC- $3,657.98
3. BofA LC- $37,533.24
4. CitiCards (Student Visa)- $2,362 (Settled in January for 35% of balance owed!)
5. USAA- $12,706.34
6. WAMU- $1,102.49
7. Capitol One- $1,663.79 (Settled in August for 40% of balance owed!)
8. Chase Cards- $1,374.46 (Settled in March for 50% of balance owed!)
9. Credit Union- $1,411.77
10. Victoria's Secret- $242.45
11. Car 1- $3,503.10 (Sold in October)
12. Car 2- $11,272.74
13. Harley- $3,400
14. Bally's- 424.80
15. Discover Card- 9,753.86
Total Debt Remaining- $90,381.09
1. CitiCards (Amex)- $8,875.42
2. BofA CC- $3,657.98
3. BofA LC- $37,533.24
4. CitiCards (Student Visa)- $2,362 (Settled in January for 35% of balance owed!)
5. USAA- $12,706.34
6. WAMU- $1,102.49
7. Capitol One- $1,663.79 (Settled in August for 40% of balance owed!)
8. Chase Cards- $1,374.46 (Settled in March for 50% of balance owed!)
9. Credit Union- $1,411.77
10. Victoria's Secret- $242.45
11. Car 1- $3,503.10 (Sold in October)
12. Car 2- $11,272.74
13. Harley- $3,400
14. Bally's- 424.80
15. Discover Card- 9,753.86
Total Debt Remaining- $90,381.09
Friday, September 18, 2009
Any accounts in collection? Go to this website to check them out
If you currently have any accounts in collection, check out this website to make sure that the agency collecting on the account isn't one of the worst of these scumbag agencies....http://www.budhibbs.com/am_worst_collection.htm
Monday, September 7, 2009
The Truth About 1099-C : Insolvency
As many of us who have settled out debts for less than the amount owed, we are always told that the credit card company will send a 1099-C for the amount forgiven. We are also told that we may have to pay taxes on the amount forgiven. Don't worry too much about this. As I explain below, there are situations when you don't have to claim these amounts as income and pay taxes on them. such as insolvency, bankruptcy and foreclosure. My explanation of form 1099-C below deals only with debtors that were insolvent at the time of the cancelation of any debt. Forgiveness of debts for foreclosure or bankruptcy are not discussed below.
When a debt is settled, the credit card company will send a 1099-C with the amount forgiven. For most of us in a situation where we have to settle our debts, WE DO NOT HAVE TO CLAIM THE FORGIVEN AMOUNT AS INCOME AND WILL NOT HAVE TO PAY TAXES ON THAT AMOUNT.
First, if you look at the instructions that come with the 1099-C, you will see that the instructions indicate that "some canceled debts are not includible, or fully includible, in your income..." Further, the instructions indicate that you should "not include canceled debts in your income to the extent that you were insolvent immediately before the cancellation of the debt." For further instruction, you can look at IRS Publication 4681, which further defines insolvency.
The IRS defines insolvency as when the total of all of your liabilities exeeded the fair market value of allof your assets immediately before the cancellation. Assets include everything that you own. For an easy way to determine whether you were insolvent, there is a worksheet to fill out on page 6 of IRS Publication 4681.
If you fill out the worksheet and confirm your insolvency, then all you have to do is fill out and file with your taxes, IRS Form 982.
Many people are scared or worried about settling their credit card debts because they think that they will incur a larger tax bill. Prior to settling any debts, go to IRS Publication 4681 and complete the worksheet on insolvency. If you are insolvent, then settle away....
*This post is not meant to give tax or legal advice. This is merely a guide on possible resolutions to problems that may arise as you settle your debts. Please consult a tax attorney or other tax professional if you have questions or need further guidance. Each individual's personal circumstances are different and you may need professional assistance.
When a debt is settled, the credit card company will send a 1099-C with the amount forgiven. For most of us in a situation where we have to settle our debts, WE DO NOT HAVE TO CLAIM THE FORGIVEN AMOUNT AS INCOME AND WILL NOT HAVE TO PAY TAXES ON THAT AMOUNT.
First, if you look at the instructions that come with the 1099-C, you will see that the instructions indicate that "some canceled debts are not includible, or fully includible, in your income..." Further, the instructions indicate that you should "not include canceled debts in your income to the extent that you were insolvent immediately before the cancellation of the debt." For further instruction, you can look at IRS Publication 4681, which further defines insolvency.
The IRS defines insolvency as when the total of all of your liabilities exeeded the fair market value of allof your assets immediately before the cancellation. Assets include everything that you own. For an easy way to determine whether you were insolvent, there is a worksheet to fill out on page 6 of IRS Publication 4681.
If you fill out the worksheet and confirm your insolvency, then all you have to do is fill out and file with your taxes, IRS Form 982.
Many people are scared or worried about settling their credit card debts because they think that they will incur a larger tax bill. Prior to settling any debts, go to IRS Publication 4681 and complete the worksheet on insolvency. If you are insolvent, then settle away....
*This post is not meant to give tax or legal advice. This is merely a guide on possible resolutions to problems that may arise as you settle your debts. Please consult a tax attorney or other tax professional if you have questions or need further guidance. Each individual's personal circumstances are different and you may need professional assistance.
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