Portland Bankruptcy Attorney.
Internal Revenue Code Section 108 generally treats cancelled debt as taxable income; however, it also lays out certain exceptions, including a discharge of debts in bankruptcy and others. Be aware that even though debts cancelled in bankruptcy are not taxed as income, they can reduce what are called "tax attributes," such as loss carry-forwards and basis in property, though these do not affect most of my clients. IRS Form 982 is the form to use, or have your accountant use, if you receive a...
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The stipulation should state that the debt will be "settled" or preferably "settled in full" upon payment of a specific amount(s) by certain date(s). It is important to get this in writing from the party who has the judgment against you before sending or releasing anything. And it is extremely important to perform your payments exactly by the time agreed. If you are late in performing, they can usually then demand full payment of the original judgment debt. So be sure you really can pay what...
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