Trusted Advocates in Massachusetts and Northern Connecticut
When clients are seeking an alternative to filing for bankruptcy, one of the options they have is to seek a debt or loan workout. This situation requires the debtor and the lender, such as a loan company or credit card company, to agree on a settlement amount that will take care of a portion or all of the debt. The remainder then can be paid in increments if necessary.
At Gogel & Gogel, our firm is experienced at handling the negotiation of debt and loan workouts for individuals and small businesses in Springfield, Massachusetts, across the rest of the state and throughout northern Connecticut. We have been focusing on handling bankruptcy and related issues for over 20 years.
Most people or businesses seeking a loan or debt workout must come into the situation with significant assets that can be turned into cash. In turn, this cash can be used to pay a large amount of the debt that is owed. This can take a great deal of stress off of a debtor as the debt is being taken care of. But there are many aspects to consider when determining if a loan or debt workout is in your best interests.
Taxes on Workouts
It is essential that debtors understand that workouts are subject to income tax. The lender sends a 1099 form that goes into the income, thus subjecting the settlement to taxes. In many cases, a small business can absorb the extra taxes that are incurred. However, since the amount of taxes can be a large sum of money, it may be more difficult for an individual to take on the extra tax obligations. Our firm can examine your situation and provide you with a realistic picture of how much tax you may have to pay, if it is possible for you to pay the taxes, and how it may impact you in the short and long term.
If we cannot arrange for a workout, you have other options, such as filing for bankruptcy.
Loan and debt workouts can be beneficial to you, but only if utilized in the correct way. Contact us to schedule your free initial phone consultation and discuss your options, including loan modifications, with a knowledgeable lawyer at our firm. Every case that we take on is billed on a flat fee basis.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
