Home / 2010 / March

Archives for March 2010

What’s the difference between the cancellation of a debt or the discharge of that same debt in a Michigan bankruptcy?

The difference has huge tax implications. Discharged debt is not taxed as income to you – BUT canceled debt is treated as income and taxed. Let’s say that you owe $100,000 on an unsecured loan. You default after paying off $50,000 and you still owe $50,000. If your banks writes off the $50,000 balance and…